Motorcycle insurance for a brand-new bike

A standard motorcycle insurance policy helps protect you and your bike in several ways:

1. It's the law. Motorcyclists in most states are required to have liability coverage. Liability coverage helps pay for another driver's medical bills or property damage if you cause an accident with your bike.

2. It helps pay your medical bills if you're injured in an accident. Personal injury protection or medical payments coverage help pay for your and your passengers' medical bills after a wreck.

3. It helps pay for damage caused by uninsured drivers. If you're hit by a driver who doesn't have liability coverage, your uninsured motorist coverage may help pay for your medical or repair bills.

4. It helps cover damage from a wreck. Collision coverage helps pay to repair or replace your motorcycle if it's damaged in a collision with another vehicle or object, such as a fence.

5. It helps replace a stolen bike. Comprehensive coverage helps pay to repair or replace your bike if it's stolen or damaged by risks like fire, falling objects or vandalism.

Comprehensive coverage and collision coverage are optional on your motorcycle insurance policy if you own your bike outright. If you're leasing or financing your motorcycle, however, your lender may require comprehensive and collision coverage until the bike is paid off.

Other coverages, such as personal injury protection or uninsured motorist coverage, may be required or optional, depending on your state's laws. Check with your insurance provider to understand which coverages are required on your motorcycle insurance policy.

Now that you know a little about the standard types of motorcycle insurance coverage, you may want to consider purchasing additional protection for a brand-new bike.

Why do I need extra insurance on a brand-new bike?

Like other vehicles, motorcycles tend to lose value over time, according to National Appraisal Guides. And standard collision coverage and comprehensive coverage factor depreciation into the amount you are reimbursed for a covered claim.

The coverage limits on comprehensive and collision coverages are the bike's actual cash value. That means the maximum amount your policy would pay if your bike were totaled would be the bike's depreciated value immediately before the covered claim.

So, if your motorcycle is totaled while it's still nearly new, the actual cash value of your motorcycle may not be enough to replace your bike with a similar model. Also, if you're financing a totaled bike, its actual cash value might not be enough to pay off your loan. That's where additional motorcycle insurance coverage may be helpful for a brand-new bike.

Types of additional coverage for brand-new motorcycles

These additional types of coverage may be available as add-ons to your motorcycle policy. Some insurers may offer these coverages as a package to help protect your investment in your brand-new bike:

• New motorcycle replacement coverage
  If your motorcycle is totaled, new motorcycle replacement coverage helps pay to replace the totaled vehicle with a new motorcycle, rather than paying you the actual cash value (which may be lower) at the time of the accident.
• Repair provision coverage
  If your new motorcycle is damaged in a covered claim, this type of coverage helps pay for repairs without taking depreciation into account.
• Loan/lease gap coverage
  This coverage helps pay off an underwater loan or lease if your new motorcycle is totaled. Gap coverage works in conjunction with comprehensive or collision coverage. It helps pay the difference between your motorcycle's actual value and what you still owe on your loan or lease.

What counts as a "new" motorcycle may depend on your insurer. If you buy a motorcycle second-hand, it likely won't be eligible for the new motorcycle coverages described above.

New motorcycle protection is typically only available if you're the first owner of a motorcycle that is newer than two model years old. This coverage typically expires once the motorcycle is more than a few model years old.

All coverages are subject to the limits stated in your policy, and some coverages may come with a deductible.