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When you make a claim on your motorcycle insurance, your insurer must determine the value of your motorcycle before providing funds. That helps the company determine if it is better to pay for the repairs or if it is more cost effective to declare the motorcycle a total loss.
Cost After Depreciation
A method that may be used to determine the value of the motorcycle is subtracting the depreciation rates from the purchase price of the motorcycle. This type of method is appropriate when the bike is relatively new because the market value for the motorcycle may not provide enough information to determine a fair price.
Depreciation rates can vary between brands and the duration of time since you purchased the motorcycle, so the insurance provider may adjust the calculations over time to reflect changes to the market.
Market Value Guides
Some companies may use a market value guide, such as the Kelley Blue Book, to determine an estimated value of a motorcycle. The downside of using a guide is that it may not consider any extra work that has gone into the motorcycle.
If your company uses a market value guide, then you need to inform the claims adjuster or the company about any adjustments or changes that have gone into the motorcycle. The work can add value to your motorcycle that is overlooked with the average estimates that are provided in a guide book.
There are several different ways that an insurance provider may determine the value of your motorcycle. Depending on your motorcycle insurance policy and the details of your situation, it may or may not be appropriate for your goals and concerns. Contact us to speak to an agent to learn more about the way that insurance providers handle your claims.