Calculating motorcycle insurance premiums

The following are some of the guiding principles used by insurance companies when calculating your insurance rates.

Your driving record and any other driver's record
Your driving record, and those of secondary riders, are an important factor in calculating your insurance rates. Driving records include:

• the number of years a rider has been licensed
• previous insurance experience
• the number of convictions or at-fault accidents (usually up to the last 6 years)

If you drive safely and defensively, your premium will be lower than if you've had a conviction or accident. In a nutshell, the better your driving record, the lower your insurance rates.

Motorcycle rider's training program
Approved motorcycle rider training courses are typically run by industry associations, safety councils or government agencies. In some provinces, like Quebec, a rider training course is mandatory before you can get your licence while others, like Ontario, are voluntary. Taking an approved training program may entitle you to an insurance discount.

Your motorcycle
Depending on the insurance company, the following factors may be used to calculate your premium:

• The size of the bike's engine in cubic centimetres (CCs), is an important factor in determining your insurance rate. Often, the size is included in the name (e.g. The Harley-Davidson XLH Sportster 1200 has 1200 CCs).
• The actual cash value of your bike. For example, if you're the owner of a 1991 Harley-Davidson Sportster 1200, how much would it cost to purchase another 1991 Harley-Davidson Sportster 1200?

Need help determining the actual cash value of your bike?
There are a number of ways you can determine the actual cash value of your bike. One way is to visit Web sites, where you can buy, sell or advertise your motorcycle. Also, you can contact a dealership in your area and they may be able to provide you with the Black Book value for your bike.

• Sport bikes, motorcycles with turbocharged or supercharged engines, and bikes judged exotic cost more to insure. These bikes tend to be faster, desirable by thieves and expensive to repair or replace.
• An anti-theft device for your bike may get you a discounted premium. It should also be noted that without an anti-theft device, some insurance companies will not offer collision or specified perils coverage.
• The claims experience of the year, make and model of the motorcycle. This means they'll check into repair costs, the rate of injury, and the likelihood the bike may be stolen.

Where you live
Motorcycle insurance rates are generally higher in urban areas where accidents, and theft or vandalism claims are more common.

Your coverage
When you purchase motorcycle insurance, you select the coverage limits and deductibles. Your premiums will cost you more if you choose higher coverage limits and the lower deductibles. Why? Because you're asking the insurance company to assume more financial risk if you're involved in an accident or claim. If you select a lower limit of coverage or a higher deductible, you can reduce your premium costs.