Limited Waiver Of Depreciation and Guaranteed Replacement Cost

Here's another topic we thought might be good to do as an educational piece regarding insurance industry terms and processes, as discussed in two previous posts titled "Bike Show Biz" and "Cancelled!". Visitors to our booth talked about a lot of things and asked a lot of questions, which was great, but a few people (and any is too many) had misunderstandings about, or simply did not know about, certain coverage that they should and which BlueCircle always explains to our clients when we quote or write up policies.

We average about 700 visitors to our booth at each show, with 50% of them being clients who stop by and say hello, talk about their experiences on two wheels, and grab some swag. The other 50% are people we'd love to have as clients, even more so when we meet someone who has not been represented as well as we think they should be when dealing with insurance. This year there were a couple of instances of people who had relatively new bikes they bought at a dealership and either did not have or did not know if they had a "Limited Waiver Of Depreciation" or "Guaranteed Replacement Cost" on the motorcycle (applicable to a new car as well).

All bikes are slightly different of course, and not all insurers offer exactly the same thing for the same cost, but safe to say that a $15,000 - $20,000 bike for an average rider would cost approximately $25 - $30 per year in order to get a "Limited Waiver Of Depreciation" on their new motorcycle.This is typically good for up to 5 years, and the coverage gives you the bill of sale value of the motorcycle (excluding dealer fees, shipping charges, taxes etc.) should there be a total loss in an accident. For that small fee, why would you not want this on your brand new motorcycle?!

On the other hand, also available with some insurers which we represent, is "Guaranteed Replacement Cost". This can be applied to a bike up to 10 years old and though it is a more costly version of protection than the "Limited Waiver Of Depreciation" it is also way more coverage in that it would actually replace your motorcycle should it suffer a total loss in an accident. If your bike is not available because it's out of production, then a motorcycle of equal quality would be used to replace your bike. Again, another great way to protect your asset from any 'depreciation' it may suffer over the short term.

New bikes should have "Limited Waiver Of Depreciation" or "Guaranteed Replacement Cost" coverage!