New take on self insurance

[IdunBrokdItAgin]

Ok, this may have been raised before but I'm raising it again.

I found out not long ago that, generally, the fully comp bike insurance premium (for a clean license holder) is based upon roughly 5% of the value insured (that being the current sale value of the bike for those slow people)

Upon reading a separate thread (in which self insurance was also raised as a possibility, but not in much detail) where a rider lost his license and the insurance company changed the terms of the contract due to this - I thought simple terms to explain this concept may help for some people.

If you are the type of rider that has never had a crash then maybe just third party insurance may be for you. (I would never suggest going without third party as you might crash into ferrari as much as you might crash into a skoda - and be liable).

But if a person was sufficiently savy (i.e did not spend the savings) and stored the saving on the premium difference they would generally find them selves a lot better off in 15 to 20 years time (using compound interest). This is not a small amount of money but anyone contemplating this needs to be aware that they are increasing short term risk for long term gain. This increased risk can have the exact opposite effect of the original intended long term outcome (very poor, as you spend the next twenty years recovering the cost of the overpriced ducati you crashed).

In effect you store the savings against a possible personal loss, if it happens you use the money you have saved. The kicker comes to when you have saved more money, in saved premium costs, than you would have been paid out by the insurance company. After that is your gains, assuming that your bike value stays the same value (through upgrading or the like).

So just a thought out there for riders to consider third party only and not spend the savings on other stuff but to put them in a savings account in case the worst does happen.

One word of warning - no one under 21 should even contemplate this approach , you are so likely to crash that it is not even funny,
Only try this method if you make it past 21 with a clean record - if you are always getting into insurance situations then this method is not for you whatever the age (you are just really unlucky or just a crap rider).

I'm seriously considering this with my car as I am paying about 9% of the insured value per year as a premium (which is a piss take if you ask me). Clean license but high risk car. May switch to 3rd party and keep the savings from now on.

[Motu]

When I worked for a small rental car company the premiums were crippling...car rental is high risk.This is 25 years ago,and it was $10,000 for 10 cars.So the boss figured if he put 10 grand in the bank,and didn't write off a car that year he'd be winning.So that's what they did...I don't think the new owner was game to carry on with the scheme,but it made sense to me.Small prangs were taken care of by me or the local panel shop,being lower than the excess anyway.This has been my personal approach too - I think we are over insured,and there is a lack of personal responsibility with insurance.The insurance company will pay out if you prang your bike or if it gets stolen,so why take too much care.Try riding your bike naked with no helmet....notice how much more care you take,how much more aware of your surroundings you are.....

[CookMySock]

The insurance company will pay out if you prang your bike or if it gets stolen,so why take too much care. Try riding your bike naked with no helmet....notice how much more care you take,how much more aware of your surroundings you are.....

This is another part of insurance I do not like, particularly for new riders. As you say, they are insured so they are all good! But they aren't - they have started their motorcycling career on the basis of a really dangerous attitude - that someone else will carry the can if they fuck up.

The proper way to start a motorcycling career, is with an attitude of personal responsibility - if I screw it up then I get to pay off the finance on the big box of broken steel and plastic parts - a nasty concept, but a very real-world one.

Same reasoning applies to the 70k speed limit - riders are bred immediately into a culture of habitually breaking the law.

Consider also who you would prefer to ride with - riders who were fully insured who had no financial consequences, or riders who knew the terrible outcome should they make a mistake?

Steve

[huff3r]

Haha. I'm paying almost 1/3 the value of my car in premiums. Unfortunately i doubt 3rd party would relistically be much cheaper... However if i were to change to a "lower-risk" vehicle i would certainly be content with third-party only and putting what i wouldve paid in insurance for my current car into a savings account for a rainy day. Oh and im only 19, but hey I drive more kms a week than most people do a month

[Flip]

Consider also who you would prefer to ride with - riders who were fully insured who had no financial consequences, or riders who knew the terrible outcome should they make a mistake?

Steve

You have some funny ideas Steve. Who would you prefer to ride with, riders who have insurance and in the event of an accident where say they cause it can replace your bike or riders who have no insurance and you are both stuffed? What are you going to suggest next ride with folk with no insurance, no licence, no rego or wof because they have to be extra carefull?

Show me a rider who does not have at least 3rd party insurance and I will show you a fool.

[Laxi]

"lower-risk" vehicle

come on huff, what could be lower risk than a gn

[CookMySock]

Who would you prefer to ride with, riders who have insurance and in the event of an accident where say they cause it can replace your bike or riders who have no insurance and you are both stuffed? What are you going to suggest next ride with folk with no insurance, no licence, no rego or wof because they have to be extra carefull? Show me a rider who does not have at least 3rd party insurance and I will show you a fool.

You evade the original suggestion and replace it your emotive rant.

Permit me to rephrase; Riding with people who care whether they come off, is different to riding with those who don't.

Steve

[SMOKEU]

I'm seriously considering this with my car as I am paying about 9% of the insured value per year as a premium (which is a piss take if you ask me). Clean license but high risk car. May switch to 3rd party and keep the savings from now on.

My car insurance costs me about 15% of the value of the vehicle each year, so count yourself lucky.

[BMWST?]

You evade the original suggestion and replace it your emotive rant.

Permit me to rephrase; Riding with people who care whether they come off, is different to riding with those who don't.

Steve

i would suggest that those who have insurance do care if they come off,otherwise why would they have insurance?

[kwaka_crasher]

I've never insured any motorvehicle and never will.

(I would never suggest going without third party as you might crash into ferrari as much as you might crash into a skoda - and be liable).

Statistically highly improbable. I see Skodas on a daily basis. Ferraris... rare as rocking horse shit.

[Mully]

It's certainly something to consider on a lower-valued vehicle (3rd party, fire & theft) and self insure for your own loss. You don't have to hit a cage very hard to do a high value of damage - particularly a Benz or summat.

On a more expensive bike, I'd be more inclined to carry full cover (if someone knocks your Ducati over in the carpark and fucks off, that'll cost a King's ransom to fix.)

It's really a matter of personal responsibility - if you are responsible enough to put the money aside so you can self insure, then go for your life.

That being said, there's plently of insurance companies, and the difference in premiums between two of them can be astronomical (some don't want young drivers, so they price themselves too high)

[peasea]

I've never insured any motorvehicle and never will.



Statistically highly improbable. I see Skodas on a daily basis. Ferraris... rare as rocking horse shit.

Or even prancing horse shit.

[Ocean1]

Self insurance is a great idea, and you can halve the risk in that initial period if two people save the premiums under a written agreement to cover eithers damage. There's about a dozen people in my group, in my experience it'll cost less than half commercial premiums to do it yourself.

Insurance companies don't care if they lose your business, they don't make anything out of it anyway, so overall the losers are just those who currently pay less than they should for insurance anyway, their premiums have to go up when they're not being subsidised by you.

[CookMySock]

i would suggest that those who have insurance do care if they come off,otherwise why would they have insurance?

So they get paid out when they come off? Why else would you buy insurance? Perhaps because you are never going to come off? If you were so sure, then why buy it?

It's a natural kiwi bloke thing - "I wont get hurt if I come off - my bike is insured - bring it muthahhhhhhh.."

Those who HAVE come off see it differently - "It will fucken hurt a lot of I come off AGAIN - the bike insurance payout was handy, but secondary compared to these fucken pins in my fucked leg." These people won't need to insure again - they have "insurance" built-in now.

We could take a lesson from them.

Steve

[caseye]

You have some funny ideas Steve. Who would you prefer to ride with, riders who have insurance and in the event of an accident where say they cause it can replace your bike or riders who have no insurance and you are both stuffed? What are you going to suggest next ride with folk with no insurance, no licence, no rego or wof because they have to be extra carefull?

Show me a rider who does not have at least 3rd party insurance and I will show you a fool.

Oh I can show you at least two Moto guzzi riders who have/had no insurance one of them even had only a learners licence even though he had ridden his 1100cc moto for nine years. point is, there are just as many foolish motorcyclists out there as there are any other sort of motorist.