Motorcycle insurance protects against financial loss in the event of an accident. It is a contract between the policyholder and the insurance company. The policyholder agrees to pay the premium and the insurance company agrees to pay losses as defined in the policy.

Motorcycle insurance provides property, liability, and medical coverage:

• Property coverage pays for damage to, and/or theft of, the motorcycle.
• Liability coverage pays for the policyholder’s legal responsibility to others for bodily injury or property damage.
• Medical coverage pays for the cost of treating injuries and rehabilitation.

Most states require drivers to have Motorcycle liability insurance before they can legally drive a Motorcycle. (Liability insurance pays the other driver’s medical, car repair, and other costs when the policyholder is at fault in an auto accident.) All states have laws that set the minimum amounts of insurance or other financial security drivers have to pay for the harm caused by their negligence while riding, if an accident occurs. Most auto policies are for six months to a year. A basic auto insurance policy is comprised of six different kinds of coverage, each of which is priced separately:

• • • Bodily Injury Liability
    • Medical Payments or Personal Injury Protection (PIP)
    • Property Damage Liability
    • Collision
    • Comprehensive
    • Uninsured and Underinsured Motorist Coverage