Motorcycle insurance

You are required by law to have CTP insurance in order to register your motorcycle in Australia. All other insurance policies are optional. Depending on the state or territory the bike is being registered in, the cost of CTP insurance may be included as part of your annual vehicle registration.

What it covers: CTP offers protection to drivers or riders for personal injuries caused by your motorcycle in an at-fault accident and compensates other people injured in the accident. The specific conditions of this type of insurance are different from state to state.

What it doesn’t cover: CTP doesn’t insure against the cost of repairs to your motorcycle or property, or anyone else’s vehicles or property.

This is the most basic form of optional motorcycle insurance cover. The cover protects you from legal liability for damage to other people’s property, so it can prevent you from financial loss should you accidently ride into your neighbour’s expensive car.

What it covers: Third Party Property covers the cost to repair damage caused by your motorcycle to other people’s property. It will also cover your legal costs if they decide to sue you over the damage that your motorcycle has caused.

What it doesn’t cover: Third party property doesn’t cover the cost of any repairs or replacement of your own motorcycle.

This cover provides protection for your own motorcycle from damage due to a fire or theft as well as protection to cover damage to other people’s property.

What it covers:  Damage to the property of others, and damage or loss of your own motorcycle from fire or theft will be covered. Some providers will have a limited cap on the amount of cover they will provide; for example a provider may cover your motorcycle up to its market value or an agreed value.

What it doesn’t cover: This insurance doesn’t cover the cost of repairs to your motorcycle if it is involved in a traffic accident.

Comprehensive motorcycle insurance provides you with the highest level of cover. The coverage provided, however, is typically more expensive than other levels of cover.

What it covers: Comprehensive insurance will provide cover from risks that may include accidental damage both at-fault and not-at-fault, theft, third party property damage, damage caused by uninsured drivers, vandalism, earthquakes, hail, storm and flood. If your motorcycle is written off within a certain period of time after it was first registered, your insurer may replace your motorcycle, depending on the policy. These policies are generally also valid in the event of an accident if the rider of the motorcycle is not a nominated rider.

Optional extras may also be available, ranging from the cost of a driver training course, cover for your replacement motorcycle should you decide to sell or replace your current motorcycle, apparel and the cost of a replacement hire car.

What it doesn’t cover: Some exclusions on cover include but are not limited to incidents that occur when the motorcycle is being ridden by or is charge of anyone who was under the influence of alcohol, drugs or medication, if the motorcycle is not roadworthy and if it is used for business purposes.

As it’s the most comprehensive for of cover, it’s worth explaining comprehensive motorcycle insurance a bit more, well, comprehensively.

In the event that your motorcycle is damaged during an accident, insurance providers will typically repair your motorcycle or compensate you for the cost of you organising and having the repairs done. Insurance providers will only pay up to the “sum insured” amount, which means either the agreed or current market value of your motorcycle that is  listed on your policy.

If the motorcycle has incurred damage that is beyond repair and has been registered for less than 12 or 24 months (the specification differs between insurance providers), the provider may give you the choice of a replacement motorcycle or pay you the sum insured amount.

The insurance provider also usually covers associated costs with an accident, such as towing, clean-up of debris, emergency expenses such as accommodation and travel, replacing damaged keys or locks, and repair of a trailer attached to your bike at the time of the accident.

Theft is the forced removal of your motorcycle from any place where you are storing it.

In order to be covered for theft, your motorcycle must be stored in a locked building such as a garage or shed. Whether your bike is at home, university, work, or elsewhere, it must be locked up tight or you may not be covered if it gets stolen.

Attempted theft is simply an attempt to forcibly remove your motorcycle from any place where you are storing it. Such an attempt may involve damage to your bike, its locks and keys, and the place where you are storing it.

If you are in a collision with a vehicle whose driver is uninsured, your insurance provider will generally pay to repair the damage to your motorcycle. Most insurance providers will cover the damage up to the sum insured amount while some have lower caps.

Your motorcycle may be damaged by storms, hail, or floods – but it should typically be covered for all three if you have comprehensive insurance.

According to the Financial Rights Legal Centre, storm is often defined as storm rains, cyclones, or severe atmospheric disturbances, any of which can be accompanied by strong wind, rain, lightning, hail, snow or dust or sand in the air. Storm damage can also include run-off rainwater that runs across the surface of the land or road, overflows from storm water drains, and overflows from pools and spas.

Hail damage is usually covered under storm damage, although many insurance providers do not list it specifically.

The definition of  what constitutes a ‘flood’ for the purposes of providing car insurance can vary from provider to provider. It’s worth checking exactly what you will and will not be covered for in the PDS and TMD for your policy before you purchase the cover.

Cyclones are usually covered under the heading of storm damage unless otherwise specified. Some insurance providers could require that the damage be caused by an officially named cyclone in order to cover the damage.

The Federal Government’s Geoscience Australia Department defines an earthquake as “the vibrations caused by rocks breaking under stress”, caused by compression in the Earth’s crust and the underground movement of rocks along the fault plane.

Fire and explosion damage covers everything from your fuel tank catching fire, to your motorcycle being burned by a bushfire or grassfire. Fire is covered by comprehensive and third party fire and theft insurance policies.

Vandalism or malicious damage means wilful (deliberate, intentional) acts of damage to a motorcycle. Examples of vandalism or malicious damage – actions that we do not condone in any way – include someone:

• Intentionally driving a vehicle into a parked motorcycle
• Drawing graffiti
• Breaking the side mirrors or headlights
• Damaging the body of the motorcycle, e.g. keying the paintwork or beating the panels
• Flattening tyres
• Setting fire to the motorcycle
• Tampering with the motorcycle in some other way

The following additional covered risks may be included in standard policies by some providers or offered as optional extra cover, as an add-on cost.

• Automatic cover for replacement motorcycle

If you decide to sell or replace your current motorcycle with another one, this type of extra cover means that the replacement motorcycle could automatically be covered by the same level of insurance. This cover is temporary and typically only lasts 14 days to give you time to sign up your new motorcycle for its own insurance policy.

• Riding apparel (safety clothing)

Riding apparel means clothing and protective safety items that are designed for motorcycle riding and worn by you:

• Helmets
• Gloves
• Jackets
• Pants
• Riding boots
• Gear bags attached to your bike

The amount of cover for riding apparel can range between providers, so check your policy.

• Replacement of keys and locks

If your motorcycle is stolen or damaged maliciously, it will need to have its keys and locks replaced and recoded so that it cannot be stolen again.

• Rider training course

There are different rider training courses available which include advanced rider courses or beginner course which allow you to attain a licence. These training courses are conducted under the direct supervision of trained motorcycle riding instructors, and different insurance providers will often have their own courses that they recommend.

You will not be covered for any incidents that occur when the motorcycle is being ridden by or controlled by anyone who is under the influence of alcohol, drugs, or medications that affect their ability to control the motorcycle.

You will generally not be automatically covered for any incidents that occur if your motorcycle is being used for business purposes. This includes using your motorcycle for hire, rider instructions, or taking passengers for fare or reward. It also includes using your motorcycle to carry hazardous and flammable goods in quantities larger than that allowed by regulation. Some insurers may offer a separate form of cover that applies to motorcycles being used for commercial purposes, or as an add-on to their standard policy.

You will generally not be covered if any non-manufacturer modification was made to your motorcycle that is not street legal, roadworthy or approved by the transport department in your state or territory.

You will typically not be covered for any incidents that occur while you are using or testing your motorcycle in preparation for any motor sports, or using your motorcycle on motorcycle tracks such as dirt bike tracks.