Insurance or Self Insurance? - BMW Luxury Touring Community
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post #1 of 7 Old Jan 17th, 2010, 1:54 am Thread Starter
Join Date: Jan 2010
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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.
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post #2 of 7 Old Jan 17th, 2010, 8:34 am
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Location: Alcoa, TN, USA
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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)
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post #3 of 7 Old Jan 17th, 2010, 8:38 am Thread Starter
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Re: Insurance or Self Insurance?

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.
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post #4 of 7 Old Jan 17th, 2010, 9:42 am
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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.
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post #5 of 7 Old Jan 19th, 2010, 10:02 pm
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Re: Insurance or Self Insurance?

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?

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post #6 of 7 Old Jan 20th, 2010, 11:45 am
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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.
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post #7 of 7 Old Jan 21st, 2010, 4:06 am Thread Starter
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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
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