Cancelling Insurance on Sold Bike

[Ninjitsu]

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Hey,

Another newb question for you insurance pros. I found a really sweet deal on a bike that is way too big for me at this time in my riding career. So I thought that maybe I could buy it, bring it to Toronto and try to flip it to make some cash. If I buy and insure it then sell it a month later, will I have to pay the cancellation fees as outlined in Vifferfun's examples in the sticky posts above? Will if I buy another bike and change the policy over to it, will that save me from paying cancellation fees? Basically I'm just not sure what happens when you sell your bike and your policy isn't up for renewal. Any help would be appreciated!

 

[jimmers]

I believe you are exempt from cancellation fees if and only if you sell your motorcycle. I would confirm that with the insurance company you are thinking of using... I probably wouldn't tell them that you're planning to cancel after a month though.

 

[Aslan]

Being exempt from cancellation fees is only part of the problem, starting a policy now means the first months payment will be a fraction of the actual amount of coverage used which would still have to be paid eventually. Switching the policy to a cheaper bike only spreads the extra over the rest of the term, it doesn't make it go away. That said, if you had paid $200 for coverage starting in August and changed bikes in a month you would only be behind by one payment and spreading that over the next 11 months is $18 on top of whatever the rate is for the cheaper bike turns out to be.

You're better off not registering or insuring it at all if you are only trying to be a middle-man, the taxes will be a larger impact on the profit margin, unless of course, my math is off and it's an even worse of a business proposition.

 

[VifferFun]

Being exempt from cancellation fees is only part of the problem, starting a policy now means the first months payment will be a fraction of the actual amount of coverage used which would still have to be paid eventually. Switching the policy to a cheaper bike only spreads the extra over the rest of the term, it doesn't make it go away. That said, if you had paid $200 for coverage starting in August and changed bikes in a month you would only be behind by one payment and spreading that over the next 11 months is $18 on top of whatever the rate is for the cheaper bike turns out to be.

You're better off not registering or insuring it at all if you are only trying to be a middle-man, the taxes will be a larger impact on the profit margin, unless of course, my math is off and it's an even worse of a business proposition.

This is the correct answer. Regardless of the reason for disposing of your bike, you are on the hook for any premiums that you have already used up but not yet paid for (meaning that my sticky applies).

 

[djbordie]

so say you sell your bike in septermber, this is probably near the best time to do so right?

versus selling it mid summer, you havent payed your premiums yet.

Where as September, you have payed the majority of the expensive months...

 

[VifferFun]

so say you sell your bike in septermber, this is probably near the best time to do so right?

versus selling it mid summer, you havent payed your premiums yet.

Where as September, you have payed the majority of the expensive months...

No -- if you are paying in equal monthly installments, then you haven't paid all of your premiums until your policy is complete. For example, if you started your policy in April and ended it in September, then you have used up a LOT of premium, but have paid for very little. Your monthly payments over the winter are required to pay for the spring/summer premiums that you have already used. The company is basically loaning you the money so that you can pay over an entire year rather than paying for the entire premium over the spring/summer. This is all in the sticky.

 

[djbordie]

sorry to jack the thread

ok so in my instance...i bought the bike last august, insured right away...so in theory i would owe nothing if i cancel anytime now.

 

[VifferFun]

sorry to jack the thread

ok so in my instance...i bought the bike last august, insured right away...so in theory i would owe nothing if i cancel anytime now.

If you decided not to renew your policy on its renewal date, then definitely you won't owe a cent; however, if it is already past your renewal date (say, by two or three weeks), then you will probably owe a bit of money (because premium is "used up" at a high rate in August since it is a prime riding month).

 

[nobbie48]

If you decided not to renew your policy on its renewal date, then definitely you won't owe a cent; however, if it is already past your renewal date (say, by two or three weeks), then you will probably owe a bit of money (because premium is "used up" at a high rate in August since it is a prime riding month).

Just so there is no confusion CANCEL your insurance in writing (Registered mail preferred) if that is your intent. Brokers lose stuff or forget. Insurance renews automatically unless the company works it a different way ie several weeks notice that your policy is cancelled unless specifically renewed.
This is to protect you in case you forget to renew or are on vacation etc. You wouldn't want to find out you didn't renew just after you rear ended the Ferrari.

 

[VifferFun]

Just so there is no confusion CANCEL your insurance in writing (Registered mail preferred) if that is your intent. Brokers lose stuff or forget. Insurance renews automatically unless the company works it a different way ie several weeks notice that your policy is cancelled unless specifically renewed.
This is to protect you in case you forget to renew or are on vacation etc. You wouldn't want to find out you didn't renew just after you rear ended the Ferrari.

That's a good point. Most companies do require a written request prior to the renewal date (to serve as proof that you are fuly aware that you are no longer insured as of the renewal date).

 

[Ninjitsu]

Thanks for all the help guys. I'm looking in to the bike and will probably go the 'not insured route'. Just hope it doesn't get stolen!

 

[VifferFun]

Thanks for all the help guys. I'm looking in to the bike and will probably go the 'not insured route'. Just hope it doesn't get stolen!

Don't park it in a Condo or on the street.

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