The Ultimate Guide to Motorcycle Insurance in Canada

Whether an experienced rider or just starting out, riding your motorcycle on an open road can be one of life’s most thrilling, pulsating experiences. There are a few things that you need for protection: a helmet, some gloves, and definitely some motorcycle insurance.

Just like you need a separate license to ride a motorcycle, you also need to buy a separate motorcycle insurance policy. This is particularly true if you ride your bike frequently.

Motorcycle insurance may be comparatively cheap or expensive to car insurance. This depends on your province, the provider, and how responsible you are as a rider. You may need to purchase extra high-risk coverage if you have a particularly accident-prone history.

Before you hit the road, find out how to get the right motorcycle insurance. We explain everything you need to know to protect yourself, your bike, and those around you.

What is motorcycle insurance?

If you drive a motorcycle, you have to buy motorcycle insurance. The mechanics of a motorcycle insurance policy are quite similar to regular auto insurance that you purchase for your car.

Once you purchase a policy, you are responsible for paying premiums to the insurance company. Premiums are usually billed on a monthly or annual basis.

Insurers calculate premiums based on various factors, which we discuss below. In return for these premiums, insurance providers offer coverage over a range of adverse events that can occur to the vehicle or on human lives or property.

In all provinces and territories across Canada, motorcycle insurance is mandatory. However, licensing requirements for different types and classes of two-wheelers can vary based on where you live. So be sure to check the specific needs of your location.

Mandatory motorcycle insurance coverages

In Canada, there are four types of mandatory insurance coverage that you need to purchase before you get your motorcycle on the road.

Direct compensation for property damage coverage

This coverage protects you against any damage incurred by your vehicle or any of your belongings inside the vehicle. If someone else’s vehicle cause these damages, with no fault of your own, your insurer will pay for those damages.

Third-party liability coverage

In a situation where you kill or injure someone or cause damages to their property with your motorcycle, third-party liability coverage comes into play. The majority of provinces in Canada require you to have a minimum of $200,000 in coverage. However, in Quebec the minimum is $50,000, while in Nova Scotia the minimum is $500,000.

Claims with third-party liability insurance provide coverage over legal costs up to the insured limit in situations of a lawsuit. Third-party liability coverage is known as Public Liability and Property Damage. Many insurers offer a minimum of $1,000,000 of coverage as a starting point on their policies.

Statutory accident benefits coverage

Statutory accident benefits coverage provides income replacement through disability benefits, and funeral and death benefits if you die in a motorcycle accident. It also has supplementary medical, rehabilitation, and attendant care benefits in case of injury.

Note that the income replacement and additional benefits only apply in scenarios where you have no pre-existing income replacement or medical benefit plan which is usually offered by an employer. Additionally, you need to list a spouse or dependent on the insurance policy you purchase for them to receive the death benefit.

Uninsured automobile coverage

What if you die or suffer an injury in a hit-and-run accident? What if the driver of the vehicle that caused an accident to your motorcycle does not have insurance? In those cases, you or your family will receive compensation from the insurance provider.

Don’t get fined!

It is best to purchase motorcycle insurance before you hit the road. In the province of Alberta, the fines for not having mandatory insurance are between from $2,875 to $20,000. While in Ontario, the fines can be extra punishing, ranging from $5,000 to $50,000. The severity of the fine depends on how many times you are caught driving without insurance. Additionally, you could have your driver’s license suspended, or your vehicle may be impounded. In general, motorcyclists are also more likely to undergo document checks than a car, so preparation is always best.

Optional coverages

There are other insurance coverages that you can add to your policy beyond the mandatory ones. This is based on the degree of assurance you require and the premiums you are willing to pay. Listed below are some of these optional coverages.

Higher satutory accident benefits coverage

Based on the type of policy you purchase, a higher statutory accident benefits coverage can offer advantages. Think of a greater income replacement amount, more supplementary medical expenses coverage, and/or increased death benefits.

Specified perils

There are often circumstances entirely outside your control that can cause loss or damage to your vehicle. These can include theft, vandalism, fire, riots, or natural disasters such as floods, earthquakes, tornadoes, etc. Make sure to read the insurance documents carefully to see which events you are covered against.

Higher third-party liability coverage

Insurers can provide over $1 million of coverage in cases where an external person is killed or injured, or their property suffers damages at the hands of your motorcycle.

What type of coverage is right for me?

The type of coverage that you should buy is highly dependent on your personal and financial profile. While everyone has to buy mandatory insurance coverages, certain optional coverages may be useful for one type of person and entirely gratuitous for another. Some examples are provided below:

• If you are part of a corporate benefits plan your employer provides, those plans usually offer income replacement and long-term disability coverage components. In this case, purchasing extra is meaningless as the corporate benefit plan would be responsible for paying those benefits if an accident occurred.
• Suppose you are retired and living on the pension provided by the government and/or your company. In that case, there is also no need to purchase additional income replacement as the pension will continue. So there is no income to ‘replace.’
• If you live in an area unaffected by natural disasters such as earthquakes or floods, having additional Specified Perils coverage for these events may not be worthwhile.
• Suppose you are unmarried and/or have no dependents. In that case, there is little use in purchasing more death benefits as optional coverage beyond the mandatory coverage. This is because surviving spouses or dependents are the only ones who can receive death benefits.

One last caveat to remember is that if your motorcycle is financed via a loan from a lender, then the lender may require you to carry an insurance package that offers comprehensive insurance over the bike. This is because the bike is the collateral for the loan, so the lender would want to ensure that their collateral remains protected under all circumstances.

How are insurance premiums calculated?

Like car insurance, several factors go into calculating insurance premiums for a motorcycle insurance policy. Depending on your specific circumstances, your premiums can go up or down based on the factors below.

Age of rider

Insurers view older riders more favourably (up to a certain limit) as they are more experienced and responsible.

Your province and city

The area that you live in has an impact on your insurance premiums. Suppose you are in a particularly accident-heavy area. In that case, the insurance provider considers this and may raise your premiums accordingly to compensate for the additional risk.

Where you plan to ride the motorcycle

Similar to your location, another consideration made by the insurance firm is where you plan to ride your motorcycle. Suppose these locations have a history of accidents, injuries or deaths due to vehicle collisions. In that case, your insurance company will again consider this and may charge higher premiums.

Your driving record

Your driving record is a major aspect of the insurer’s profile evaluation. A clean driving record is viewed much more favourably, so it is in your best interests to be as responsible and faultless in your driving as possible!

Frequency of riding

Using your motorcycle frequently increases the risk of accidents or injuries. To this end, a greater frequency of ridership usually translates into a higher premium charged by the insurance provider.

Value of the motorcycle

A more expensive make and model of motorcycle usually attracts a higher premium due to the more significant damages that come with it. On the other hand, a less pricey make or model will likely secure you lower premiums, all else being equal.

Age of the motorcycle

Older motorcycles may come with higher premiums due to a greater probability of them being close to the end of their useful life than newer motorbikes. You may have to check with your insurance provider regarding their policies to evaluate the motorcycle’s age.

Your insurance company may also classify you as a high-risk driver if you meet specific criteria. The insurance provider will first examine the number of claims on your driving history to determine if you are a high-risk driver. A larger number of accidents or collisions indicates a higher degree of risk. Insurance providers will look at other aspects of your age, license level, and the number of traffic tickets you have racked up over time. For example, a young driver (under 23 years of age) with several claims on his/her driving record is much more likely to be classified as a high-risk driver than a 35-year-old driver with fewer claims.

Naturally, a classification as a high-risk driver will result in higher premiums paid by the policy buyer to the insurance company.

How can I lower my motorcycle insurance premiums?

As the price of insurance goes up around the country, you may be looking for some ways to save on those monthly premiums. We have provided tips below to help you get the most cost-effective premium for your value.

Take rider training

Some insurance providers require all novice riders to complete a government-approved motorcycle safety course. However, doing these courses may be worthwhile for all riders as it can reduce your premiums by up to 30%!

Shop around for better prices on motorcycle insurance

To get the best rate for yourself, don’t be afraid to look around the marketplace and see what is available. Compile the best offers that various insurance providers are willing to give you, and benchmark those offers to select the one that gives you the greatest coverage for your needs.

Don’t stop your insurance

It often pays to have your motorcycle insured even when it is not in use (for example, in the winter). Many insurance providers ask about the number of years of continuous coverage. If you pause your coverage, that number will go down, resulting in a higher premium.

Assess your motorcycle coverage wisely

Look at your personal environment, circumstances, and the amount of riding you expect to do. Based on these factors, select the coverage that best fits your needs. By eliminating certain Specified Perils, you may be able to shave off a few bucks of your premium each month. However, it is also best to err on the side of caution. If you are unsure about something, it is best to have coverage over it rather than suffer the consequences later.

Drive safe

It goes without saying that your driving record is a key consideration factor in calculating your premiums. Avoid traffic tickets, penalties and other accidents to ensure that you have a favourable view in the eyes of the insurance provider.

Cash is king when buying your bike

As mentioned above, the lender usually has the right to dictate what insurance package you need if you buy your bike with a loan. However, suppose you purchase the bike outright with cash. In that case, you can control your destiny and select the insurance package that best suits your unique needs.

Consolidate insurance

Suppose you have a pre-existing insurance policy (for your home, car, etc.) with a provider. In that case, you may be able to gain a discount on the combined policy if you bundle your motorcycle insurance as well. Contact your provider for more details as the discount differs from place to place based on internal policy.

Use an insurance broker

Going through an insurance broker can provide you with several benefits. Firstly, it gives you greater market visibility, enabling more choice for you as a customer. Secondly, a good insurance broker will have deep relationships within the industry and can guide you on how best to approach a provider and position yourself to receive the best offer and premium.

Take a higher deductible

By paying a higher deductible, you can potentially receive a lower premium. The deductible is the amount you are responsible for when an accident occurs before the insurance policy kicks in.

For example, suppose there are damages worth $5,000, and you have a $1,000 deductible. In that case, you are responsible for paying the first $1,000 damages before the insurance company funds the remaining $4,000.

However, say you were to increase that $1,000 deductible to $1,500. In this case, the reward to you as a customer would be reflected in a lower monthly premium.