Editor's note: This article first appeared on iii.organd is reprinted here with their permission. Click here for the original post.

Choosing the right insurance policy is much like choosing theright motorcycle. You want it to fit your needs and lifestyle, butat the same time be within your budget. Although most statesrequire you to carry a minimum amount of liability coverage, othertypes of coverage are usually optional. Always ask your insuranceagent or company representative which laws apply in your state.

In order to find out what coverage is best for you, it isimportant to understand all the options available. Continue readingto learn more.

[Related: Study: Motorcyclists confused aboutcoverage]

(Photo: nanD_Phanuwat / Shutterstock)

Liability coverage

Liability insurance covers bodily injury and property damagethat you may cause to other people involved in an accident. Itdoesn't cover you or your motorcycle. Find out if your coverageincludes Guest Passenger Liability, which provides protection inthe event that a passenger is injured on the motorcycle. Whether ornot this is included depends on the laws of your state and thecompany issuing the policy.

Collision coverage

Collision insurance covers damage to your motorcycle if you areinvolved in an accident. Your insurance company pays for damages,minus your deductible, caused when you collide with another vehicleor object. Collision insurance usually covers the book value of themotorcycle before the loss occurred.

[Related: Motorcyclists lose control more than they'rerear-ended]

(Photo: TFoxFoto / Shutterstock)

Comprehensive coverage

Comprehensive coverage pays for damages caused by an event otherthan a collision, such as fire, theft or vandalism. However, justlike collision coverage, your insurance company will pay fordamages, minus your deductible, and will cover only the book valueof the motorcycle.

[Related: Top 10 most stolen motorcycles]

Keep in mind most comprehensive and collision coverages willonly cover the factory standard parts on your motorcycle. If youdecide to add on any optional accessories such as chrome parts, acustom paint job, trailers or sidecars, you should look intoobtaining additional or optional equipment coverage.

Uninsured/underinsured motorist coverage

Uninsured/underinsured Motorist Coverage covers damages to youand your property caused by another driver who either doesn't haveinsurance (uninsured) or doesn't have adequate insurance(underinsured) to cover your damages.

This coverage typically pays for medical treatment, lost wagesand other damages. If your uninsured/underinsured motorist coverageincludes property damage, then your motorcycle would also becovered under the same circumstances. Check with your insuranceprofessional to see if property damage is included or needs to bepurchased separately.

(Photo: Shutterstock)

Tips for the cost-conscious rider

Many factors can play a role in determining what your insurancecosts will be such as your age, your driving record, where you liveand the type of motorcycle you own, or being a graduate of arider-training course.

• Many companies offer discounts from 10% to 15% on motorcycleinsurance for graduates of training courses, such as the MotorcycleSafety Foundation (MSF) rider course. Riders under the age of 25,usually considered a higher risk, may see some savings by takingthis course. It’s also a good idea for cyclists who have alreadyhad accidents.
• Maintaining a good driving record with no violations will alsohelp reduce your premiums.
• In many northern states, riders may save money by buying a"lay-up" policy. With a lay-up policy, all coverage exceptcomprehensive is suspended during winter months.
• Find out what discounts your insurance representative offers.Multibike discounts for those insuring more than one bike,organization discounts, if you’re a member of a motorcycleassociation, and mature rider discounts for experienced riders, arejust a few possibilities. Discounts can range anywhere from 10% to20%, depending on the company and your state. Availability andqualifications for discounts vary from company to company and stateto state.
• Keep in mind that the type, style (such as a sports bike vs. acruiser) and age of the motorcycle, as well as the number of milesyou drive a year and where you store your bike may also affect howmuch you pay for your premium.

Choose the agent or company that's right for you. If you alreadyhave auto insurance, you can contact the same insurer. Otherwise,ask friends, relatives and co-workers where they bought their autoor motorcycle insurance. Your local motorcycle shop may have acompany they refer customers to. Or you can check local motorcyclemagazines and newspapers for insurance professionals advertisingmotorcycle insurance.