Insurance or Self Insurance? - BMW Luxury Touring Community
 
LinkBack Thread Tools Display Modes
post #1 of 7 Old Jan 17th, 2010, 1:54 am Thread Starter
 
Join Date: Jan 2010
Posts: 35
Insurance or Self Insurance?

Quotes I recieved to insure my new 1200 GS have all been above R800/month. That is is well above $100. Motorcycle insurance is just very expensive in SA.

As a comparison, my newish 4x4 double cab turbo diesel, with a value more than twice the GS is R1100/month. This is related to the high rate of theft and hijacks here in South Africa.

I have not had an accident in more than 25 years, but I had a truck stolen. The excesses on theft are high and you lose a lot anyway; like on my truck that was 2 years old I got paid out R160 000 and a replacement was R280 000.

Now I figure if I just put R800 away into an account each month, to insure myself, is that not a far more profitable option? In one year, I have put away R10 000. Of course there is the risk of my bike being stolen tomorrow and I lose everything, But I dont leave the bike unattended in public places where vehicles get stolen, as its not my primary means of transport. Its either in my garage, or somewhere in sight. Its never out of sight for long, and never at a predictable time.

The truck I insure as it is more of atheft risk, and I would need to replace it immediately, as it's my main transport for work and for business. I could not absorb the loss, would have to replace it immediately, hence I need insurance.

I paid the bike cash so have no debt on it. reckon I could survive without it until i build up cash for another.

The other isssue is that I am accumulating debt at the moment as I am starting a High Court application to have my children removed from the mother and restrict her access to them. Advocates, lawyers, court and shrink costs.... Her shrinks are on my side and first suggested it. To minimise this debt by not paying insurance is a risk, but saves a lot on interest. Our intertest rate is like 15%.

The idea of forking out extra each month for insurance, which is not absolutely necessary, seems at this stage something I can avoid and accept the risk.

Any thoughts on the matter?

Last edited by HVanDerMerwe; Jan 17th, 2010 at 2:26 am.
HVanDerMerwe is offline  
Sponsored Links
Advertisement
 
post #2 of 7 Old Jan 17th, 2010, 8:34 am
rlv
Senior Member
 
rlv's Avatar
 
Join Date: Sep 2005
Location: Alcoa, TN, USA
Posts: 372
Re: Insurance or Self Insurance?

what if you run over someone and kill them while on the bike, you saving for that also.

Richard Vogt
2007 (Silver) R1200RT
2010 R1200GSA (Gertrude)
rlv is offline  
post #3 of 7 Old Jan 17th, 2010, 8:38 am Thread Starter
 
Join Date: Jan 2010
Posts: 35
Re: Insurance or Self Insurance?

Quote:
Originally Posted by rlv
what if you run over someone and kill them while on the bike, you saving for that also.
That here is covered by the Road Accident Fund. Insurance is not compulsory here. We have theft, collision and fire, and Riot insurance.
HVanDerMerwe is offline  
 
post #4 of 7 Old Jan 17th, 2010, 9:42 am
Senior Member
 
rattler50's Avatar
 
Join Date: Nov 2006
Location: Wichita Falls, Tx, USA
Posts: 1,337
Re: Insurance or Self Insurance?

I'd opt for the insurance or a good AK-47 and a gun rack for the bike..........

2006 R1200RT
2005 K1200LT Ocean Blue
2003 K1200LTE Black
Totaled Oct 2, 2010
2006 Kawasaki Vulcan 2000
Most of us would rather be ruined by praise than saved by criticism.
rattler50 is offline  
post #5 of 7 Old Jan 19th, 2010, 10:02 pm
Senior Member
 
Join Date: Mar 2006
Location: West Milford, NJ, USA
Posts: 978
Re: Insurance or Self Insurance?

Quote:
Originally Posted by HVanDerMerwe
... and Riot insurance.
Wow! Riot insurance!


Anyway, I am afraid that your questions are very specific to S.A.

Every country has their own requirements - here in the US it even it differs greatly by the state - therefore our comments may be amusing, but not very informative.

In NJ you must buy liability insurance for a motor vehicle (fairly inexpensive for motorcycles). Protection from theft, collisions that are your fault or caused by parties unknown are not covered - unless you buy what we call "comprehensive" coverage. As I understand, this is what you are contemplating: saving money for comprehensive-style premiums.

That must be very much your call. On statistical average, you'd be ahead of the game (as, statistically, your premium cover the losses and overhead of insurance providers and you'd skip the overhead). On the other hand, you could need the payout due to an accident next week. Your own level of paranoia must determine what you are comfortable with.

The only point I'd make is that having all that saved money in your own acount makes it a tempting target to use for other purposes. You'd have to make sure that you indeed keep it tagged only for your self-insuring fund.

Robert in Northern NJ

'09 R12GS, '08 R12RT, '03 R1150RT, '01 F650GS - time to thin the herd?


To view links or images in signatures your post count must be 10 or greater. You currently have 0 posts.
rdwalker is offline  
post #6 of 7 Old Jan 20th, 2010, 11:45 am
Senior Member
 
Join Date: Nov 2002
Location: Downey, CA, USA
Posts: 1,330
Re: Insurance or Self Insurance?

It may save you money but it is a gamble. I chose to self insure a low risk piece of real estate. I saved thousands over several years. Recently a tree fell in a windstorm and landed on a neighbors car. Fortunately the damage was minor and I'm still way ahead but the tree was large enough to total the car. I was just plain lucky, the savings (and then some) could have been wiped out in a mere second. I am rethinking how much risk I care to be exposed to.
mjordans2000 is offline  
post #7 of 7 Old Jan 21st, 2010, 4:06 am Thread Starter
 
Join Date: Jan 2010
Posts: 35
Re: Insurance or Self Insurance?

Thanks Guys. Good answers. Well yes the risk is total loss. But the bike is not my primary risk of transport. Stastically Im ahead on insurance overheads and profits.

Also, Im probably a lower risk than average since I dont commute, reducing peak accident time, and I dont leave my bike in public places, where theft is rife.

The money I save gets placed in my mortgage bond, reducing the interest. It can also be withdrawn again, and then some. hence, the money is no more a tempting target than the excess already available on my bond.

But I hate paying out money to lawyers. Last week what i paid in legal fees so far are equal to 2 years insurance on the bike. A necessary fruitless expenditure
HVanDerMerwe is offline  
Reply

Quick Reply
Message:
Options

Register Now



In order to be able to post messages on the BMW Luxury Touring Community forums, you must first register.
Please enter your desired user name, your email address and other required details in the form below.

User Name:
Password
Please enter a password for your user account. Note that passwords are case-sensitive.

Password:


Confirm Password:
Email Address
Please enter a valid email address for yourself.

Email Address:
OR

Log-in











Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Show Printable Version Show Printable Version
Email this Page Email this Page
Display Modes
Linear Mode Linear Mode



Similar Threads
Thread Thread Starter Forum Replies Last Post
Insurance required? missusfinz RT Series 19 May 15th, 2010 10:15 am
BMW Riders Don't Wave... MikeERideWNC Bike Talk 97 Aug 11th, 2009 8:45 pm
Does your insurance cover medical expenses? rdwalker Bike Talk 11 Sep 18th, 2007 2:24 pm
An interesting insurance question... danbrew Chit Chat 19 Oct 19th, 2006 6:21 am
BMW MOA Endorsed Insurance??? JetDoc Bike Talk 2 Jun 20th, 2006 4:04 pm

Posting Rules  
You may post new threads
You may post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On
Trackbacks are On
Pingbacks are On
Refbacks are On

 
For the best viewing experience please update your browser to Google Chrome