Why Do Insurance Companies Total Motorcycles With Little Damage?

Motorcycle owners often find themselves scratching their heads when their insurance company declares their bike a total loss after an accident, even when the damage appears relatively minor. However, there are several reasons an insurer may decide to total a motorcycle, even if the damage seems insignificant.

Depreciation Plays a Role

One of the biggest factors in the total loss equation is depreciation. Motorcycles tend to lose value rapidly after purchase compared to other vehicles. By the time a rider has put several thousand miles on their bike it has likely dropped significantly in value from the original purchase price.

If the motorcycle has depreciated substantially, repair costs that seem minor could actually exceed the current value of the bike Insurers compare the repair estimate to the actual cash value of the motorcycle If it would cost more to fix the bike than it’s worth, the insurer will likely total it out.

For example, suppose a rider purchased a motorcycle for $8,000 two years ago. An accident causes cosmetic damage, such as scraped plastics and a broken turn signal, amounting to a $1,500 repair bill. However, due to depreciation, the motorcycle is now only worth $3,000. It makes more financial sense for the insurance company to total it and pay the owner the current value rather than spend more on repairs than the bike is worth.

Difficulty Obtaining Replacement Parts

Insurers also total out motorcycles when repairing them is impractical due to limited availability of replacement parts. Many motorcycle manufacturers, especially those that have gone out of business, have little to no replacement parts available.

If the damaged components are no longer in production, the insurer may have no choice but to total the bike, even if the rest of the motorcycle is undamaged. They can’t legally repair the vehicle without the proper replacement parts.

Additionally, body parts like fairings and fenders are often model-specific with no aftermarket alternatives available. If these components become damaged beyond repair, the insurer again has no option but to total out the bike.

Extent of Frame or Engine Damage

Major damage to critical components like the frame or engine will almost always result in a total loss declaration. Repairing or replacing these parts typically exceeds the value of most motorcycles. The frame, also known as the chassis, is the foundation for the entire bike. Since everything bolts onto it, damage that compromises the frame’s strength and integrity often requires replacing the entire thing.

Likewise, engine damage involving cracked cases or a bad crank generally means a new engine is needed. Engines are complicated and expensive to repair. With labor costs, it usually makes more sense for insurance companies to pay out the value of the motorcycle rather than try to fix substantial engine damage.

Airbag Deployment

On motorcycles equipped with airbag systems, deployment of the airbags will usually total the bike. Resetting airbag systems after deployment is extremely labor-intensive, requiring removal and replacement of the entire airbag assembly. When you factor in the cost of replacement airbag components, it typically exceeds the value of most motorcycles.

Some newer BMW, Ducati, and Honda models feature airbag systems as standard or optional equipment. While the airbags may save riders in a crash, they leave insurers little recourse but to total affected motorcycles.

Flood or Fire Damage

Flood damage presents numerous challenges when repairing motorcycles. The water can damage electronics, contaminate lubricants, and cause corrosion throughout the engine and drivetrain. Electrical gremlins often plague bikes after being flooded. With the extensive labor and numerous parts required to refurbish flood-damaged bikes, insurers usually consider them total losses.

Fire damage can also lead to total losses. Heat from flames can warp and melt plastic bodywork. The intense heat also compromises the integrity of rubber hoses, seals, tires, and other components. Along with the damage from fire itself, the corrosive effects of water or chemicals used to extinguish the flames can add hidden issues that only show up later. Insurers would rather total a burnt motorcycle than deal with these types of latent problems down the road.

Unibody Construction

Some sportbikes and cruisers utilize unibody construction where the frame and bodywork are integrated into one component. This results in a lighter motorcycle, but it also means damage is more apt to total the bike. With a conventional steel frame, corrosion and minor damage can be remedied by replacing small sections of tubing. However, when the frame is part of the bodywork, damage necessitates replacing entire sections of plastic and integrated subframes. The high cost of replacing these large unibody components often totals affected motorcycles.

Liability Concerns

Insurers may opt to total a motorcycle over liability concerns. If the frame or another safety-related component becomes damaged, the insurer risks legal repercussions by repairing and putting an unsafe bike back on the road. Lawsuits related to faulty repairs are bad publicity they want to avoid.

Likewise, many components on modern bikes involve electronics and computerized systems. Even with factory repair procedures, it can be difficult to restore these to proper working order after an accident. Upset riders who believe shoddy repairs led to subsequent failures or accidents could again leave insurers in hot water. From their perspective, totaling liability-prone bikes is the smart legal and financial move.

Other Contributing Factors

• Age of the Motorcycle – Insurers are more inclined to total out older motorcycles that have higher miles and maintenance costs.

• Lack of Anti-Theft Devices – Bikes lacking security features like GPS trackers are targets for theft. Insurers may total lightly damaged bikes to avoid another potential claim.

• Prior Damage – Preexisting damage not caused by the current accident can tilt the scales towards totaling rather than repairing a bike.

• Policy Limitations – Deductibles, liability limits, and other policy restrictions can impact the total loss equation for borderline cases.

• Rider Safety Concerns – Severely damaged wheels, brakes, or suspension components may result in totaling if rider safety is jeopardized.

Fighting Back Against a Total Loss

While insurers have their reasons, accepting a total loss settlement when your motorcycle could be safely repaired is certainly frustrating. Riders do have options to push back against a total loss in some cases:

• Have an independent appraiser assess the vehicle and provide an estimate for repairs. Presenting a repair quote much lower than the insurer’s estimate may change their mind.

• Negotiate a better settlement amount if there is evidence your motorcycle was undervalued. Receipts, classified ads for similar bikes, etc. can demonstrate it’s worth more than they claim.

• Utilize an attorney that specializes in total loss claims to review the case and negotiate on your behalf. Insurers sometimes back down if pressured legally.

• Threaten to switch insurers if the company won’t budge on the total loss declaration. They may relent rather than lose your business.

• Accept the settlement, purchase the salvaged bike back from the insurer, and make repairs yourself or have a shop do them. This route takes some effort but allows you to keep your motorcycle.

With persistence and the right strategy, riders have a fighting chance to overcome a total loss call and keep their bikes on the road. Understanding why insurers total vehicles goes a long way toward being prepared when disaster strikes. While we hope an accident never happens, arming yourself with knowledge helps ensure things go as smoothly as possible in difficult situations. Ride on and enjoy the freedom of the open road, but stay safe and be prepared if the unexpected occurs.