Motorcycle Insurance for the NC700X in the USA

[showkey]

KBB and NADA values are a joke when it comes to values.....especially with motorcycles.

Insurance is going to start with black book that is updated weekly based on prices paid at auction for actual sold vehicles.

In the case of NC the insurance will see new bikes selling to $5000.......so thinking your used bike that 4-6 years old is still worth &5k is like wishing on a star. Now if the guy that hit you is at fault their insurance might give you “gift” to settle early and get rid of the claim......based on risk and exposure vs actual motorcycle value.

 

[ld_rider]

KBB and NADA values are a joke when it comes to values.....especially with motorcycles.

Insurance is going to start with black book that is updated weekly based on prices paid at auction for actual sold vehicles.

My insurance company started with KBB and NADA retail (State Farm) and added more $$ from there. They did not use wholesale dealer black book values which are about the same as KBB and NADA anyway.

For example, my motorcycle according to Black Book pricing is a bit over $4,000 @ dealer wholesale ($4,055 to be exact) and priced at a bit over $5,100 @ retail. Similar to KBB and NADA trade-in value and retail value. Even if an insurance company used Black Book values the NC is still a $5,000+ motorcycle (retail).

Your insurance will pay retail value (plus any sales tax) and whether they use Black Book or KBB or NADA the numbers will be similar, around $5,000 usd

 

[GregC]

Single data point: My $1,000,000USD umbrella (auto, motorcycle, rental property, primary residence) was about a $54/year add on to my policy. Had no idea it was that inexpensive.

Umbrella policies are pretty cheap - but they usually require that you carry pretty high coverage on your primary policies (car, home, personal articles). The umbrella kicks in AFTER your primary coverage is exhausted, so it’s a backstop in case you get an excess judgment against you (a judgment beyond your primary coverage). That’s why it’s relatively cheap.


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[ld_rider]

Umbrella policies are pretty cheap - but they usually require that you carry pretty high coverage on your primary policies (car, home, personal articles).

Indeed!
The trip to $1,000,000 usd liability coverage started with my first motorcycle rally years ago. Was required to have at least $300,000 usd in coverage (at the time, I was at $100,000). I called State Farm and for about $150 they increased from $100k to $300k. Easy peasy. Again, I had no idea how inexpensive it was for the additional coverage.

When I entered the IBR in 2011 I wanted a million dollar umbrella. Made the call and bingo, had the 1 million umbrella added for a few $$ more and it covered all vehicles and real estate like ah, an umbrella.

 

[TacomaJD]

Umbrella policies are pretty cheap - but they usually require that you carry pretty high coverage on your primary policies (car, home, personal articles). The umbrella kicks in AFTER your primary coverage is exhausted, so it’s a backstop in case you get an excess judgment against you (a judgment beyond your primary coverage). That’s why it’s relatively cheap.


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Yep that is what I was told (have to have really good primary coverage policies first). I don't know if my policies are high enough for it or not, they very well may be. I need to call and get a quote on an umbrella policy.

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[showkey]

So if insurance is so willing and able to retail value plus vs replacement value..........why is there GAP insurance. When you choose not to have GAP coverage and your vehicle is totaled you end up paying on a loan for junked vehicle.

Because it very easy to owe more than the value of any vehicle. The lender might force GAP coverage because they know insurance pays replacement value........ NOT retail value.

In the end it’s a personal decision.........my bet on a 2012 NC is not worth collision or comp and if it’s totaled some day it’s FEDEX or UPS truck that backs over it with great commercial insurance and not a dead beat with zero insurance. If a deer pops out and it’s totaled ....oh well, I can buy one a replacement for $2000-$2500......assuming I am still able to ride.

 

[670cc]

In my area, the “problem” with using umbrella policies is I can’t purchase uninsured/underinsured coverage up to the umbrella limit. I can only purchase uninsured/underinsured up to the vehicle policy liability limit.

 

[TacomaJD]

I got curious and looked over my bike policies. I thought they were both equal but it appears the 2013 NC is much cheaper than my 2006 Vulcan Nomad. Just to have underinsured motorist on the Nomad policy is an extra $177/yr. I could have sworn my agent said they didn't offer underinsured motorist on their bike policies and that we could only get it on our autos. I guess I was wrong. And that may have spurred from what a different ins company told me, as I shopped around before landing with Allstate a year or two ago, who knows.

Here are my premiums for each

VULCAN NOMAD

AND THE NC700X

So total annual premium for the NC is $165/yr for full coverage with underinsured motorist. I think you'd be crazy not to carry such a cheap policy. One on my Nomad is questionable, however. If I ever crashed it and needed collision, and had to pay $500 deductible plus what that more expensive policy costs each year, it may not be worth it. I may look at minimizing the Nomad's policy.


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[ld_rider]

So if insurance is so willing and able to retail value plus vs replacement value..........why is there GAP insurance. When you choose not to have GAP coverage and your vehicle is totaled you end up paying on a loan for junked vehicle.

Why gap insurance? Great question.

It is an insurance instrument designed for people that buy vehicles they can't afford and for European car manufacturers ;-)

How it works: Mr. Jones wants to buy a new Jeep Grand Cherokee and trade in his 18 month old Toyota RAV4. Sadly, his RAV4 is worth $4,000 less than he owes on it (very common).

But, he really wants that Jeep. We would take that negative $4K equity and "roll" it into a new loan on the Jeep. That would result in a Jeep with a title loan that was higher than the actual value of the underlining asset. Why? Because Mr Jones put very little (or none, more common than you probably think!) money down.

In the case of a total loss, the Gap insurance will pay the difference between the inflated loan balance and the actual fair market retail value that was received from the insurance company. That saves people like Mr Jones big money in the event of a total loss, especially in the first year or two of ownership.

It is interesting if you think about it; The longer the loan has been in repayment, the less Gap insurance will pay since the delta between the LTV is shrinking every month. Once the loan value and the retail value of the asset are similar, Gap insurance would pay nothing. Zero. Consequently, when discussing older motorcycles Gap insurance is usually a non-factor. Most 2012 and 2014 motorcycles have reached a point where their retail value is low, (the insurance payout) as is the loan balance. This means no gap exists, which is what Gap insurance well, insures ;-)

What might be even more interesting is the Gap insurance premium in my experiences has usually been rolled into the new loan along with the neg equity from the trade. Poor Mr Jones is getting hammered and doesn't even know it (or care). No wonder he was upside down on the trade and now needs Gap insurance!


In my above example, Mr Jones would be a prime candidate for Gap insurance. In fact, I would try to sell him some. Well, actually we tried to sell everyone Gap insurance (along with paint protection and other nonsense). Hey, we had to eat too!

Because it very easy to owe more than the value of any vehicle. The lender might force GAP coverage because they know insurance pays replacement value........ NOT retail value.

Agree, it is VERY easy to owe more than the value of any vehicle, especially true for those that purchase European cars that have depreciation curves that drop like a rock, folks that haven't paid off their last car and roll the neg equity (and Gap insurance premium) into a new loan, or customers that fall for the "sign and drive" leases w/no down payment. All those borrowers are great candidates for Gap. Or for some financial help. Seriously.

Lenders require some borrowers to purchase Gap not because of the insurance payouts are at wholesale auction or dealer cost levels, but because the loan was funded so far OVER retail (often over the MSRP !!) that even a fair payout at the retail value by the insurance company won't cover the loan amount. I bought a new 2019 Tacoma in November 2018 for $25,536 and my credit union wanted to lend me $31,000 (!).

As you point out, in the case of my mythical Mr Jones, some lenders might require Gap insurance. What Gap insurance does is pay the overinflated balance due on the loan due to some funny number crunching. It has zero to do with the amount insurance companies payout (which is typically full retail or market value+). You will never see Gap insurance as a requirement for any loan with normal LTV (loan to value ratio). You know why? Because lenders know insurance companies pay full retail on a total loss, and since the borrower didn't have $5k of extras tacked on to the MSRP (and the subsequent loan) the lenders position is covered by the insurance company. Hence no Gap is required.

In the end it’s a personal decision.........my bet on a 2012 NC is not worth collision or comp and if it’s totaled some day it’s FEDEX or UPS truck that backs over it with great commercial insurance and not a dead beat with zero insurance. If a deer pops out and it’s totaled ....oh well, I can buy one a replacement for $2000-$2500......assuming I am still able to ride.

Agree 100 percent that it is personal decision. But, people should make their decision after their own due diligence has been completed and they have the facts.

But, back to the original intent of my post: In my (limited) experience of personally having two total losses (my Goldwing and Harley Davidson), my brother's totaled Harley Davidson, and my sister's totaled Corvette, and 15 years of reading "I crashed today" stories on motorcycle forums each has received full retail value + from their insurance companies. Yes you will have to disregard their first offer, yes you might have to show them the receipts for the new tires and helmet (which is what I did) but it is very common to receive what amounts to full retail on an insurance claim involving a total loss. Suggesting otherwise isn't really supported by any evidence and I also doubt many state insurance commissioners would allow insurance companies to regularly deceive customers by not making fair and equitable payouts on losses.

Your experiences are obviously very different. Again, like you say it is an individual decision.

EDIT: I would point out to the paranoid guys with covered license plates selling on the GL1800 forum to stop that nonsense, keep their comprehensive coverage and HOPE that someone steals it! They would probably get more $$ that way ;-)

 

[GregC]

Gap insurance is to vehicle loans as PMI is home mortgages.


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[TacomaJD]

Gap insurance is to vehicle loans as PMI is home mortgages.


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Except PMI is now tax deductible beginning last year. LOL

 

[ld_rider]

Gap insurance is to vehicle loans as PMI is home mortgages.

You said in eleven words what it took me about 500 words to say in my post ;-)

 

[showkey]

Gap insurance is to vehicle loans as PMI is home mortgages.


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Except GAP pays the owner’s debt on the quick depreciation. The vehicle drops in value faster than the debt is being paid. Lose and win for the owner.

PMI insures the banks interest and the owner pays the cost. Win win for the bank.

The real answer is don’t not go in debt on toys and depreciating vehicles.

 

[GregC]

Gap and PMI both insure the owners debt to the lender. They both protect the lender from the debt being greater than the value of the asset (bike or house). And both get implemented when LTV gets too high (for a bike it’s the combination of too low a down payment and fast depreciation, for a house it’s too low a down payment, a long term so that principal doesn’t drop meaningfully for years and generally fairly modest appreciation).


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[dduelin]

I got curious and looked over my bike policies. I thought they were both equal but it appears the 2013 NC is much cheaper than my 2006 Vulcan Nomad. Just to have underinsured motorist on the Nomad policy is an extra $177/yr. I could have sworn my agent said they didn't offer underinsured motorist on their bike policies and that we could only get it on our autos. I guess I was wrong. And that may have spurred from what a different ins company told me, as I shopped around before landing with Allstate a year or two ago, who knows.

Here are my premiums for each

VULCAN NOMAD

AND THE NC700X

So total annual premium for the NC is $165/yr for full coverage with underinsured motorist. I think you'd be crazy not to carry such a cheap policy. One on my Nomad is questionable, however. If I ever crashed it and needed collision, and had to pay $500 deductible plus what that more expensive policy costs each year, it may not be worth it. I may look at minimizing the Nomad's policy.


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If you have your auto and bike polices with the same carrier ask if you can stack liability and Underinsured on the auto policy and extend UM to the bikes. Then you can remove UM on the bike policy, which can save you a ton of money.

 

[TacomaJD]

Everything we own is with Allstate. Had to keep it all together to get coverage on our rental houses. When I was shopping around, it seemed as if most try to make it unaffordable if you only want part of your things insured with them, or like Allstate said, had to have all our stuff with them before they would write rental policies. They were cheaper than anybody else I shopped, except for our home. They were at $1260/yr on our house, and Alfa was around $1000 even. Which was great....until Alfa quoted our rental houses at god awful high rates, like nearly double what Allstate charged and it was for less coverage than we got with Allstate. Auto costed nearly double with Alfa what it was with Allstate too. Alfa's 6 month rates were comparable to Allstate's annual rates. So I ate the higher homeowner's policy with Allstate and moved all our stuff there, because overall everything else was cheaper.

For example though, previous homeowner's policy with Cincinnati through a local independent agent was only $802/yr. Our other policies with them were equally cheap and that was for good coverage too. I carried those policy packets from Cincinnati around to all the local agents after Cincinnati stopped selling residential policies through that independent agent, and nobody could touch those numbers. Went to Farmers, dropped off the packets and said I want comparable coverage and rates to this, she said she would work on it and call me back. Later that evening she called and said she couldn't even get close to it, that I could come get my old policy packets back whenever.....did not even try to quote me any numbers Lol. I absolutely hate shopping for insurance.


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