Have you ever been in a motorcycle accident? In the U.S., motorcycles make up only 3% of all registered vehicles and 0.6% of all vehicle miles traveled. However, motorcyclists accounted for 14% of all traffic fatalities, 18% of all occupant fatalities, and 4% of all occupant injuries.
If one is caught in a bad accident, the chances of the motorcycle being totaled are pretty high. A motorcycle is more vulnerable to being damaged in an accident than a car.
So, what can you do if you have a totaled motorcycle in your hands after an accident? The most important thing to do is to contact your insurance provider to ensure you will get the correct compensation. And ensure that you are not on the hook for additional payments or penalties.
A proper insurance claim will help you cover the replacement cost of a new bike to replace the totaled motorcycle. While it may not hold the same sentimental value, at least you won’t have to add to the feeling of loss by paying extra for your wrecked vehicle.
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You just totaled your motorcycle in an accident.
First things first, always have motorcycle insurance for your ride. Not all states require riders to have motorcycle insurance. Nevertheless, you must have one. Get one with comprehensive coverage. It should have liability coverage and cover medical bills if needed.
You can also get an insurance policy with collision coverage. This pays for the repair of the motorcycle caught in an accident, regardless of who is at fault.
If your motorcycle is insured, total loss insurance kicks in whenever your ride is totaled in an accident. “Totaled” means that the vehicle was severely wrecked enough that insurance companies consider it to be a total loss and not worth taking to a repair shop.
Each state defines what makes a motorcycle totaled differently. Some use a term called Total Loss Threshold (TLT). This means that the damage needs to exceed a certain percentage of the value of the vehicle before it is considered totaled.
Some others use Total Loss Formula (TLF). In this, a motorcycle is considered totaled if the cost of repair plus the vehicle’s salvage value exceeds the actual cash value (ACV).
Once the insurance adjuster has checked the damage, then you can then file a total loss motorcycle insurance claim.
What is the Actual Cash Value (ACV) of a motorcycle?
The insurance company will pay for a motorcycle based on its fair market value or the motorcycle’s Actual Cash Value (ACV). This is the amount that your motorcycle is currently worth on the market, and it depends on many factors. This includes the motorcycle’s model years, how long you have had it, local demand for it, etc.
Many riders do customize their motorcycles, and you may have done it as well. You may have spent a lot on after-market modifications. However, this does not affect the motorcycle’s fair market value. This will almost always be lower than what you paid for the motorcycle originally.
Just like cars, motorcycles depreciate in value each year. In fact, a brand new bike, right out of the dealer’s shop, immediately depreciates in value.
Factors that affect the fair value of a motorcycle
- How many miles does your motorcycle have on the odometer? The fair market price of your motorbike depends on this. The higher the number on the odometer, the lower the value of your motorcycle.
- If the bike was recently purchased, then it may have a higher value.
- The more miles you have driven, the more wear and tear on a bike. Engine parts will have significant damage, and their overall worth will decrease.
What if the totaled bike is financed?
Even if you are a motorcycle enthusiast, you may not own your motorcycle outright. It’s very common to get a new bike financed. So, you may have bought your motorcycle on an installment basis or after taking a loan.
But what if your motorcycle gets totaled while you are still paying for it? In this situation, it is essential to get gap insurance in advance.
Gap insurance is also known as Guaranteed Asset Protection insurance. It helps cover the remaining difference between the actual cash value of your totaled motorbike and what you still owe for it.
This way, you can avoid the hassle and expensive affair of paying for your financed motorcycle, which is no longer usable.
Important things to remember while making an insurance claim on a totaled motorcycle
- Contacting the insurance company as soon as possible after the accident.
- Negotiating with the insurance company if the actual cash value offered is too low.
- When you are planning to make an insurance claim for your totaled motorcycle, always keep the receipts! This includes statements from repair shops, auto body shops, doctor visits, and insurance communications.
- Document everything thoroughly, along with photos as evidence. Doing all this will mean that your insurance carrier will process your claim faster.
- You should also file total loss claims as soon as possible. In some states, you have to submit the claim within 30 days of the accident.
What if you don’t have motorcycle insurance?
While you should always have motorcycle insurance, sometimes you may be caught in a bad situation without insurance. In this case, repair costs may be too high. And the only thing you can do is sell the totaled motorcycle as scrap or as a salvage vehicle.
This will mean that you will get back very little of what you actually spent on the motorcycle. If it is totaled, your bike’s value will plummet. Salvage motorcycles generally cost little and scrap value is also very low.
So, if this thought makes you nervous or anxious, do get the insurance asap. Not only that, but if you were in such a bad accident that your motorcycle got totaled, your medical expenses may be a lot. So, all motorcycle riders should get a comprehensive insurance policy to face such situations.
Conclusion
So, what can you do if you have a totaled motorcycle in your hands after an accident? The most important thing to do is to contact your insurance adjuster to ensure you will get the correct compensation.
Collision insurance will also ensure you are not on the hook for additional payments or penalties. Moreover, a proper insurance claim will help you cover the replacement cost of a new motorcycle.
If you don’t have motorcycle insurance yet, I hope this is a wake-up call for you. Contact your nearest insurance agents and get a motorcycle insurance policy soon.
