Motorcycle Insurance Cost: Agreed Value Coverage

If your motorcycle is a total loss – because it’s been demolished in an accident or stolen – wouldn’t it be nice if your motorcycle insurance company would pay you the fixed amount that you’d agreed on ahead of time?

Agreed value coverage offers you that protection, and it can be an invaluable add-on coverage to your standard motorcycle insurance policy.

Below is general information about how agreed value coverage works and why it’s especially important for certain types of motorcycles.

What Is Agreed Value Coverage
Agreed value coverage in motorcycle insurance is a type of policy that allows the insurer and the policyholder to agree on the value of the motorcycle at the time the insurance policy is issued. This agreed-upon amount is what the insurer will pay out in the event of a total loss, minus your deductible.

Key Features Of Agreed Value Coverage
There are some key features that are part of most insurance companies’ agreed value coverage.

Coverage In Case Of An Accident Or Theft

In the event of a total loss – due to an accident or theft – agreed value coverage usually kicks in.

Fixed Payouts On Agreed Value Coverage
If your motorcycle is a total loss, the payout is a fixed amount (that you agreed to when you purchased your insurance policy), and this amount doesn’t go up or down over time.

Agreed Value Coverage For Custom, Classic, And Vintage Motorcycles
Agreed value coverage is especially beneficial for custom motorcycles, classic motorcycles, and vintage motorcycles, when the market value might not reflect the actual worth of the rare bike.

No Depreciation Factor
Unlike standard motorcycle insurance policies, which issue payouts based on the current market value of the motorcycle (which can depreciate substantially), agreed value coverage ensures that you’ll receive a payout that represents the motorcycle’s value at the time the policy was written.

Higher Insurance Premiums
Premiums for agreed value coverage are usually higher than for standard “actual cash value” policies, because they factor in the potentially higher payout.

Benefits Of Agreed Value Coverage
The primary benefits for agreed value coverage include:

  • guaranteed payout in the case of a total loss
  • protection of your investment (including any enhancements, customizations, and modifications)
  • simple claims process (with no disputes over the value of your motorcycle at the time of your claim)
  • ideal coverage for rare, vintage, classic, or customized bikes (helps ensure that you get full value for your bike)

Documentation For Agreed Value Coverage
To qualify for agreed value coverage, you’ll probably need to provide documentation to justify the agreed value of your motorcycle. This proof could include receipts for custom parts and/or appraisals for rare or vintage bikes.

Regular Reassessments Of The Agreed Value
It’s a good idea to regularly assess the agreed value of your motorcycle, especially if you make additional modifications to your bike or if it goes up in value!

Check With Your Insurance Agent Or Company
Please note that the information provided above is for informational purposes only. For the most accurate, up-to-date, specific information, check with your insurance agent or insurance company!