Motorcyclists who love hitting the open road on their hogs — engines roaring that distinct pop-pop sound as they cruise along — typically turn to a motorcycle insurance agency for coverage.
In addition to selling motorcycle policies, these agencies typically offer broader coverage for automobiles along with home and property, too. Many customers who own motorcycles take advantage of coverage options that bundle various types of policies, saving them money.
Selling additional coverage options to customers who have a policy for their motorbike and bundling it with home and auto coverage for a car or SUV isn’t just profitable. It’s also a great way to lock in loyalty, especially if a customer lives in a household with other members who need auto coverage from the same policy.
But there’s another reason why operating a motorcycle insurance franchise can be profitable: in some areas, motorcyclists must pay high premiums for their bikes due to higher road risks.
If you’re looking to buy the franchise rights of a motorcycle insurance agency for sale so you capitalize on this trend, you need to focus on one important factor: location. Here’s what you need to know.
How Does Location Influence the Profitability of a Motorcycle Insurance Franchise?
Crashes happen, and the more they happen on a specific roadway, the higher the premiums usually are for motorists who live near it and drive on it regularly — that’s how location influences the profitability of a motorcycle insurance franchise.
If your agency’s coverage area is in a large city (or one that’s home to more than 100,000 residents), the risk of crashes along its most traveled roads is much higher than in a smaller town that experiences less traffic congestion. So is the risk of someone stealing a customer’s motorbike.
Motorbike policies cost around $60 per month on average — much cheaper than basic auto coverage, which averages around $179. But motorcyclists face higher risks on the road than car, truck, or SUV drivers do, and if they live by or travel on risky roads often, it’ll drive their premiums up.
Premium prices also vary by state. California’s roads and highways cut through cities of all sizes throughout this large state. Some are busier than others, with histories of frequent crashes — sometimes minor, sometimes fatal. That’s likely why California has the highest motorbike premiums in the U.S., averaging $151 per month.
By comparison, Nebraska and Maine are both smaller, less populated states. In Nebraska, monthly premiums are around $38, while in Maine, it’s $41.
Why Zip Codes Matter When You’re Looking for a Motorcycle Insurance Agency for Sale?
Insurance agents used zip codes to identify risky areas based on police reports and public records. Remember, risk drives premiums. The riskier the roads, the higher the odds of vehicle theft, and the more customers have to pay for motorbike and auto coverage.
Before teaming up with a reputable insurance company as a franchisee, do some preliminary research by noting specific trends in your community’s neighborhoods. Do certain intersections in some neighborhoods experience heavy traffic regularly? Do a lot of crashes happen in these areas? How about vehicle thefts?
Once you have a sense of what’s going on in these areas, look up the zip codes and jot them down. When you’re ready to buy the franchise rights for a motorcycle insurance agency for sale, you can speak about the trends you’ve noticed with a representative working on behalf of the franchisor. This person can then help you determine the best location for your new agency.
How Does Bundling Coverage Plans Boost Revenue for a Motorcycle Insurance Franchise?
Customers love a good deal, and bundling several lines of coverage does just that, discounting monthly premiums when two or more policies are combined under one plan. Many customers often consider these discounts a reward for their loyalty.
Discounting cuts prices, so you may be wondering how your motorcycle insurance franchise can turn a profit by offering bundled coverage. Here’s how bundling works.
Say a customer has coverage for a single motorbike and pays a $58 monthly premium — that’s the full amount you receive from them in 30 calendar days. Now let’s say this person decides to buy their spouse a bike and wants to add them to their coverage policy.
Your agency can offer to upgrade its policy so that instead of just covering one bike, it would now provide coverage for both — what’s known as a multi-motorcycle policy. Under this new policy, you would charge a $106 monthly premium — or $53 per bike.
That’s a $5 discount for each motorcycle, which makes the customer happy, and you walk away having gained an additional $48 in monthly revenue by providing coverage for the second bike.
That’s just one example. You can also offer coverage that bundles auto or homeowner policies with motorcycle coverage.
Say the customer decides to add homeowners insurance to their existing multi-motorcycle policy. A homeowners policy alone is $170 per month, but because they are bundling coverage, you offer it to them at a discounted $160 monthly premium.
Under this new bundled plan, you’ll now be receiving $208 from this customer every 30 calendar days — that’s $150 more than you were receiving from them from their original, single-motorcycle policy. So bundling does work — for both the customer and your business.
How Do You Find the Best Motorcycle Insurance Agency for Sale?
The best insurance companies selling franchising rights are nationally recognized, reputable, and trusted names in the industry. These companies have been issuing coverage to customers for decades and have a proven track record of providing reliable policies for customers no matter what.
These companies have a solid business plan for their franchisees — a plan filled with strategies based on years of experience, ensuring success and profitability.
If you have questions about launching your new motorcycle insurance franchise, these companies usually have a dedicated team of representatives ready to work with you from start to finish, guiding you every step of the way.
Launch Your New Motorcycle Insurance Franchise Today!
If you want to become a franchisee and are looking to invest in a motorcycle insurance agency for sale, consider partnering with Freeway Insurance. We will guide you every step of the way, ensuring your new branch is a success.