Good Driver Discount - Mike Felder Insurance

1647 Willow Pass Rd, Suite 347, Concord, CA 94520
Phone Toll free in California 800-7-CYCLES
California's Largest Motorcycle Insurance Agency

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MIKE FELDER'S INSURANCE COLUMN
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MIKE FELDER'S INSURANCE COLUMN THUNDER PRESS LICENSING I sometimes get amazed at how varied the answers get when I ask someone if he/she has a motorcycle license. The answers come back in a multitude of ways. People either used to have one, or are planning to get one, or feel since they have been riding for so many years without one that they don't need one. Having correct licensing means one thing to the insurance industry and something totally different to the legal community. Since I am not a lawyer, I will "tip-toe" around the legal aspect. The state of California requires all cyclists to have a motorcycle license. This license is obtained in a two step process. You can go down to the local DMV (Dept of Motor Vehicles) and take a written test. Once passed, you can ride a cycle NOT on the freeway, WITHOUT a passenger, and ONLY during daylight hours. The "permit" is good for a year. After succeeding an actual riding exam, you are issued a "permanent class M. If you take the riding part on a small cc bike, you get a small cc license. Without proper licensing you expose yourself to the following hassle: Your cycle can be impounded on the spot and you can be arrested. So much for the legal side of it. The insurance industry has been legislated to provide a "Good Driver Discount" (GDD) for qualified applicants. This action was one of the things that came out of Prop 103. The GDD is roughly 20% lower than the standard rate. In short, a sizeable discount. The law required the insurance companies to spell what qualifications were needed in order to obtain that discount. Most every company out there agreed to this. For the most part, all companies set similar guidelines....one minor violation or less. The cycle insurance companies went one step further...a properly endorsed motorcycle license for a specified period of time. That period of time usually meant three years. Variations on this theme were pretty abundant over the last few years. ut, during the last year one company went through a Dept of Insurance (DOI) audit, another change administration hands and a third tightened up their ways. In short, all companies are playing on a level field. While proper licensing is essential in the eyes of the state, the majority of insurance companies do not mandate it. Not having the proper licensing will not change your ability to get insured, it just changes your ability to get the best rate. Some companies will automatically give you the GDD the second year, regardless of licensing, but you will be forced to pay the higher premium the first year. And with all the changes that seem to surround the insurance industry in California, I wouldn't bet on that arrangement to last. Once your insurance policy is issued, the policy is in force.....end of story. I have had people call and ask me if not having a properly endorsed will void their coverage. SIMPLE....NO! If the company took your application, ran a motor vehicle report, knows that you do not have proper licensing, and issued a policy....you have a policy. The only difference is, it is about 20% higher than you could have purchased. My mom has a great saying. "The name is Felder, not Rockefeller." I don't know about you, ut for 20% is a substantial savings. In terms we all can identify with, it means paying an extra $3000 for your new Harley. Nobody cares to do that. You shouldn't have to do it on your insurance either. If you haven't taken the necessary steps to secure proper licensing, do so. While I don't care to scream the virtues of the legality of it, I do want to scream about the money it keeps in your pocket, where it belongs. I fought getting my license properly endorsed for years. When I added up what 20% did for my rates, I was first in line at the DMV! Remember, the smart (and 20% richer) buyer is the educated buyer!

Information in this article is probably correct as of the date it was written. Please check with your insurance agent or call Mike at 800-729-2537 before you make any life changing decisions based on what you read here. Comments are always welcome.