What is Underwriting

Your new motorcycle may be your pride and joy and you can’t wait to show her off. But before you take off into the sunset, you have to make sure that you have the right coverage and that you have the correct underwriting for it.

Underwriting for insurance agents and companies involves weighing the risks and exposure of potential clients. This determines how much coverage the client should receive, the cost of that coverage and, most importantly, whether or not the insurance company will even accept them as clients. The fundamental criteria for evaluating the potential risk includes: the client application, the type of motorcycle, the coverage and the garaging location of the motorcycle — or zip code.

The job of the underwriter is to evaluate the potential risk criteria and to determine the premium that will be charged in order to cover that risk. The underwriter also makes sure to protect the insurance company from losses by finding a suitable rate. Often, the policy ends up with exclusions to the coverage provided. As a result, the circumstances when a claim will result in payment are limited.

The guidelines of underwriting differ with each company and the information required depends on the type of coverage that is needed. Automobile insurance, for example, requires the client’s driving record in order to apply a suitable premium and rate. Any factors that are used should be objective and relate specifically to the amount of coverage needed. It should protect the company and be consistent with applicable laws.

Many companies have options for their clients with motorcycles, from purchasing a separate policy for their bikes to adding an endorsement to an already existing policy. Different plans can cover accessories, travel loss, replacement costs, safety apparel, and/or collision and liability.

If you have questions, comments or concerns about choosing coverage that protects you, contact 911 Biker Law at the Law Office of Michael Brehne.