Do you drive a snowmobile, motorcycle, all-terrain vehicle, classic vehicle, boat or similar seasonal vehicle? If so, then it’s good to understand the nuances of the coverage
A regular car insurance policy’s annual premium is considered earned evenly throughout the year. Therefore if the policy were to be cancelled half way through its term, only half the premium would be earned and the other half would be returned, assuming no cancellation charges.
This is not the case for seasonal vehicles. The annual premium for these vehicles is normally earned during the entire season they are in use. For snowmobiles this would be during the winter, for motorcycles this would be during the summer. Knowing this will help you to avoid any surprises such as cancelling the coverage on your seasonal vehicle during its off season and not getting any premium back.
The reason these insurance policies are structured this way is to help encourage leaving coverage in place for the entire year rather than constantly canceling and reinstating them during the on and off seasons.
A typical earned premium chart may look like the following
| Snowmobile |
|
| Month |
Earned Premium |
| November |
10% |
| December |
25% |
| January |
25% |
| February |
25% |
| March |
15% |
| Motorcycle |
|
| Month |
Earned Premium |
| March |
5% |
| April |
10% |
| May |
10% |
| June |
20% |
| July |
20% |
| August |
20% |
| September |
10% |
| October |
5% |
Here are some things to keep in mind:
- Beware of the timing of coverage and the seasonal use. For the first time in adding a seasonal vehicle to an existing policy you may be faced with the cost of the majority of the premium for the season, and then faced with the cost all over again if that policy renews shortly after the season.
- Ask the insurance company about how their seasonal polices work. They vary from company to company.
- Always advise your insurance provider of coverage changes well in advance.
