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Bike Insurance Explained

Bike insurance is required by law in the UK but there can be substantial differences between the levels of cover offered by individual policies and their premiums. Here we look at how bike insurance works, what to look for from a policy and how to find a competitive deal.

How does bike insurance work?

Bike insurance is designed to cover the costs of riding related damages or injuries – however, whether or not you and your own bike will be protected is dependent on the level of cover you take out.

There are three options:

Third party only: Cover against liability for damages and injuries to third parties as well as damage to their property.
Third party, fire and theft: Cover against fire damage, theft and attempted theft in addition to third party only cover.
Comprehensive: All of third party, fire and theft cover plus comprehensive policies will usually cover damage to your bike in the event of an accident (subject to exclusions) and provide additional cover against accidental damage, vandalism, medical expenses and more.

With comprehensive cover there are normally several additional features that may either be offered as standard or be available for an additional premium. Examples include breakdown cover, cover for equipment, temporary replacement bikes, overseas cover, legal assistance, and cover for riding other bikes in emergency situations.

Is there anything else to watch out for?

As well as carefully choosing a policy that offers the right level of cover you should also thoroughly read the terms and conditions. In particular, look out for:

The policy excess: Insurance companies set a ‘compulsory excess’ – an amount you have to pay in the event of a claim. So for example, if your claim was valued at £500 and you had a compulsory excess of £250, then both you and the insurer would pay £250 each. In addition, most insurers offer a ‘voluntary excess’ – this is an additional amount that you agree to pay from the outset in case a claim is necessary. So if you had a voluntary excess of £200 on top of a compulsory excess of £250, then the insurer would only pay £50 towards a £500 claim. Setting the voluntary excess at a high level will lower your premiums but it should only be set at a level you can comfortably afford.
Exclusions: These are circumstances in which your insurer will not offer a payout.
No-claims bonus: Most providers offer a no-claims bonus, which is a percentage off your premiums for every year you go without making a claim up to a pre-determined limit. Remember however, that building up a no-claims bonus will not stop premiums from rising year on year so you should still shop around annually.

So how much will you pay for bike insurance?

Insurers determine premiums based on the risk you are perceived to pose – the more likely you are to make a claim, the higher your bike insurance premiums will be. Factors that can influence premiums include: your claims history; your annual mileage; how many riders you plan to include on the policy and their driving record; your own driving record; whether or not you are married; your occupation; how you plan to use the bike (such as for commuting, or business purposes); your address; and the bike itself – such as its age, security features and how much it would cost to repair/replace.

Providers assess these risks in different ways – and so premiums can differ widely between insurers. As such, it’s best to shop around and compare as many policies as possible. Using a comparison website can help you save time and money as the leading websites can compare policies from a range of insurers with one search. The cheapest quote is always returned first and so you should be careful to check to see whether it offers suitable cover or if you need to pay a little more to get the protection you need.

There are ways to reduce premiums too. Most insurers offer discounts if you: fit insurer-approved security devices; park in a garage at night; increase your voluntary excess; pay premiums annually therefore avoiding monthly interest charges; agree to a mileage limit; and only add experienced riders with clean records on to your policy.

What do you get for your money?

When you have bought a motorbike insurance policy you will receive the following documentation:

A cover note: This is a temporary certificate of insurance that typically lasts around 30 days until the insurer has completed its paperwork.
Certificate of insurance: This is your legal motorbike insurance document as required by the Road Traffic Act.
Schedule and/or policy document: This sets out the full terms and conditions of your insurance.

Remember it is your responsibility to read all the documents sent to you, to check the level of cover you requested is correct and to look for policy exclusions so you are aware of the exact cover you have agreed to. If there are any issues, contact your insurer directly.