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Ask Our Lawyer - February 2012

Insuring a Custom Bike

Q: I have a bike that I bought stock five years ago and have made a number of improvements to it since then, including a lot of chrome, custom paint, and other customized equipment. My bike was stolen last month, and the insurance company only wants to offer me book value for the bike. By my estimation, it’s worth about twice the book value of a stock bike. Is there any way I can convince the insurance company to re-evaluate their offer?

A: There may be a way to do that, but it depends on how good your records are. Most insurance contracts cover customization and items added to bikes, but the insurance company has to assure itself that the customizations that you claim you added were actually added to the bike and became a part of the bike. There are a number of ways to do that. The easiest and best way is to document all the customizations done to the bike. This means keeping meticulous records of the modifications done to the bike, who did them, when they were done, how much they cost, and what effect those customizations had on the value of the bike. Dealer-ships like Harley Davidson South Side do a perfect job of keeping records of work they do for customer motorcycles. These records include all that they do mechanically and also the records of custom items added to a bike by the customer. Most first rate dealerships follow the procedures used by Harley South Side, so check with your motorcycle dealership as a trove of good records that the insurance companies will rely on.

Let’s assume you did a custom job with three distinct components: First of all, you did some body work - you put on a new fork, new handlebars, and new wheels.  You did that during the course of one season and didn’t plan on doing any more work that season.  It would be a good idea once that work was completed, to take pictures of the bike, put them together with all the receipts from the work done to the bike and send copies of all that information to your insurance company, asking them to add that to your file and explaining that those modifications have been done to the bike since you purchased it.  You may at that point want to get an appraised value for the bike from an appraiser.   A good appraisal can be obtained for $100 -$200 and they are more neutral than you will be and consequently more persuasive to the insurance company.   Often,  appraisers work at a motorcycle shop or dealer, but the modern trend is that appraisers work independently and thus are more credible to the insurance companies.  You want to get an appraisal if the value of the bike with the additions is more than the value of the bike plus the value of the additions.  For example, you bought the bike for $5,000.00; you added $5,000.00 worth of additions, but those additions caused the bike to be worth $15,000.00 rather than the value of the bike plus the parts, which was $10,000.00.  In that event, getting an appraisal would be in your best interest so you could prove to the insurance company that the bike is worth more than the sum of its parts.  

Now let’s assume it’s the next season, and you have added a lot of chrome to the bike.  Again, you would want to take pictures of the bike, keep copies of the receipts, description of the work done, and submit it to the insurance company for their files so you can maintain the value of the bike.  Let’s assume now that you have decided to complete the customization and get a custom paint job on it.  Once you finish all the customization that you plan on doing, at that point you need to get an appraisal of the value of the bike to show the insurance company what it’s worth with all the customizations.  With the documentation and evidence of the customizations, you will be in a good position to prove the value of the bike to the insurance company should you need to make a claim.

Some insurance companies offer riders with customized and historic/antique bikes special policies.  If your bike has value for collectors beyond the book value for a stock bike, check with your insurance agent about modifying your insurance to make sure your investment is covered.  With some insurance companies you can agree in advance as to the value of your bike so you don’t have a hassle  if you crash.  My experience is that the cost for that agreed insurance amount is nominal and it saves a lot of grief debating the value of chrome and your hard work.

Loan Your Bike?

Trust your gut: when in doubt, don’t

Q. Against my better judgment, I loaned my shovel head to my brother- in- law to keep peace in the family. I told my wife that we are responsible if he gets into a crash and hurts someone. My wife says we are not responsible - who is right? ABATE MEMBERS

A. Most states have a theory of law that provides that the lender of a motorcycle can be liable for damages/injuries that happen while the motorcycle is being used by the borrower. That theory provides that if you loan a bike to someone that is not competent to ride, you may be responsible. They call that theory “negligent entrustment”. And that is also true if you loan your bike to someone with known alcohol/drug issues and have lost driving privileges because of their driving record or that a reasonable person would believe was impaired at the time you loaned your bike. Generally, you can rely on the judgment of the state agency that issues drivers licenses and motorcycle endorsements. That is unless you have current information that tells you that a person may not be competent to ride/drive. Trust your gut instinct - when in doubt, don’t. And don’t even think about loaning your bike to a minor unless you are prepared to be responsible for any damages caused. Remember that the insurance policy on the bike will provide coverage for the rider, and should provide coverage to whomever you loan the bike.

Ok, Now They Want Us To Wear Helmets Driving Cars?

Your 75 year old grandmother is driving down the road in her new car, a teal colored Myers that she just paid $6500 dollars for and the stereo is blaring (well maybe not) and she is feeling good. Just one more stop at the license branch to get her vanity plate for her new CAR and a call to her insurance company and she is done. Right? Not so quick there big fellow. Grand mom’s new Meyers has only 3 wheels. So what, you ask? Well, in many states, three-wheeled vehicles are classified as motorcycles and as such need a MC endorsement. This means that grandma will have to take and pass a motorcycle safety course to drive her new car. But she can get a temporary permit, you say. You are correct, but guess what? In many states she will have to wear a helmet while driving her new car until she gets her MC endorsement and in helmet states that helmet may have to stay.

Delivery Kids - Is Yours Insured When They Borrow The Flh Or The Family Car?

Q. My son has a part time job delivering sub sandwiches after school and on weekends. He borrows the family car and from time to time my FLH to make these deliveries to make extra money. He had a crash when making deliveries and is ok physically, but my bike is trashed. The insurance company is asking a lot of questions about the part time job. I am nervous about their intentions. They want to come by my home and talk with me about my son’s job delivering sub sandwiches. What should I do and is it possible I may not have coverage for this crash? ABATE MEMBER

A. All insurance companies require its insureds to cooperate with them during the investigation of a claim. Your claim is no different, so you need to answer their questions accurately. The policy you have with the insurance company covering the FLH is a contract with specific terms. Most policies contain exclusions for certain activities. And many insurance policies exclude commercial operations from the standard policy for autos and motorcycle. In general, if you are using the vehicle in a commercial enterprise, then a commercial policy may be required. The rub comes with infrequent uses that are arguably commercial. The key is how commercial is defined. If a motor vehicle is used incidentally for an employer (for example, running to NAPA for parts) then most policies provide coverage. Send us a copy of your policy and the police report and we will call you as to your next step. You should put your son’s employer on notice as to this crash. The employer may have additional commercial coverage, so you may still be off the hook on this one.

Great Idea? Let’s Eliminate Insurance Coverage For Drivers, Caught Texting, That Run Over Motorcyclists - Really?

At NTSB hearings recently, the evils of texting while driving and the mayhem caused were discussed and a call was made for a nationwide ban on the use of cellphones and other portable electronic devices while driving. One brilliant person even proposed that insurance coverage for causing injury while texting should be denied. That person reasoned that such a punishment would deter texting while driving and make our roadways safer. Of course, the same could be said for speeding, driving under the influence and reckless driving. What about fiddling with the radio, going for the last french fry or having a heated conversation with your spouse? Where do you draw the line? And just who would bear the burden of insurance coverage that is denied? We would. The proposal plainly misses the point of insurance to begin with. Insurance is to provide a monetary remedy to those that have been injured by the bad/negligent acts of others. Having insurance is our way of being socially responsible for injury that we cause to others. Isn’t that what insurance is for?

Side Car Is On - Thanks To Larry And TA At L.A. Cycle

Before I decided on putting a side hack on my old ‘84 FLH shovel, many told me that a side hack had “all of the disadvantages of a motorcycle with absolutely none of the advantages.” I chose to ignore them and proceeded dead ahead. Here is what I have learned. You drive it like a car; there is no such thing as counter-steering, and it is true about right hand turns. I am still trying to figure out the mechanics of that one. Fifty pounds of lead later, I have made those dreaded turns seem like I will not tumble upside down. I have practiced in a parking lot lifting the side car up to test my limits - that is until I was run off the parking lot by a nervous owner. He was asking things like “why would anyone want a motorcycle that looked so unstable.” I didn’t have a good answer for that except I will say that I really like it and after a couple hundred more miles I believe I will be totally comfortable. Actually, I love it. Now my dogs go with me and I can plow through snow and ice just like a four wheeler. That is a hoot. My next trick will be getting my wife to test it out. So far, she is not having it. And if I make it to 90, I can still do the Miracle Ride. So what is there not to like about a side hack?

ABATE, though many know it not, is one of the greatest rights organizations ever;
but what it reaches for by far exceeds what it has achieved,

and what it has achieved is magnificent.

Remember, injured ABATE members pay only 28 ½% of total recovery and expenses as approved by client, consistent with and conforming to applicable state law. Elsewhere, you may pay 33 ⅓%, 40% or even 50% of your recovery. And, ABATE members are not charged for recovery of damage to your motorcycle, and have access to a 24-hour toll-free telephone number.

Call us at (800) 25-RIDER

If you have any questions you would like to ask the lawyer, please submit them to ASK OUR LAWYER, at rodtaylor@abatelegal.com. © 2012, A.B.A.T.E. Legal Services.