Motorcycle Insurance
A few words on insurance coverage
Proper Insurance Coverage
We all understand that motorcycling is a ton of fun but it can also be a risk. Risk can be managed in a number of ways. Proper maintenance, frequent tire checks, and continual rider training can help you from going down. Wearing good gear will help to protect you in the event of a fall or a crash. When the crash becomes very serious is when good insurance coverage comes into play.
Getting a motorcycle policy sufficient enough to cover you in any eventuality is #1. Having a medical coverage plan is a plus. Death and Dismemberment coverage plan can be helpful to your family if you are hurt or die. These insurance plans can be purchased fairly inexpensively and can really pay off in a big way when something drastic happens. If you are a good and responsible rider, chances are you will never have to use your insurance. But strange things can happen on the road so it is best to have good coverage just in case there is an emergency.
Please consider the following:
Motorcycle Policy
For your motorcycle policy, consider purchasing uninsured motorist (UM) coverage, and underinsured motorist (UIM) coverage at the highest limits you can afford. UM coverage protects you when you are injured in an accident caused by someone who does not have auto insurance. UIM coverage protects you when you are injured in an accident caused by someone who has auto insurance, but not enough to cover the full amount of your claim. You will also need to elect the amount of coverage for your personal injury protection (PIP) benefits. PIP benefits are, in general, payments that your insurance company makes for medical expenses and wage loss incurred by you as a result of an accident, regardless of whether or not the accident was your fault. Your insurer will seek reimbursement for the PIP benefits paid, either from your ultimate claim recovery or through inter-company arbitration with the insurance company for the at-fault driver.
Most states have very low minimum limits for PIP, UM and UIM coverage which are often not enough to cover a serious motorcycle accident. For just a little more money you may be able to get much better coverage, so be sure to speak with your insurance agent about all of the options and costs. For instance, it might not cost much more to get $250,000/$500,000 UM/UIM coverage as opposed to $100,000/$300,000 UM/UIM coverage. The small number is the highest amount insurance will pay for one person and the larger number is the highest amount insurance will cumulatively pay for all persons covered in a single accident.
Please keep in mind that insurance laws vary from state to state, such that the amount of UM/UIM benefits you can access may be limited. First instance, in Oregon, you cannot “stack” your UIM policy limits on top of the liability limits of the at-fault driver, which thus limits the amount of UIM benefits you can access. As an example, let’s say you have $100,000 per-person UIM coverage in Oregon, and you are injured by a driver who has liability coverage of $100,000 per person. Your total claim (including medical expenses, wage loss and pain and suffering) is $150,000. Can you tap into your UIM benefits? The answer is no; not in Oregon or any other state where stacking is not allowed. This is because your UIM coverage did not exceed the liability coverage of the at-fault driver.
(FYI, I carry $250,000/$500,000)
If you do get in an accident and are injured, you should promptly contact an injury lawyer for legal advice. Let us know if you need a referral and we can put you in touch with a well-qualified personal injury attorney in your area.
Umbrella Policy
It is estimated that 10%-15% of drivers on the road are not insured and the vast majority of the remaining drivers on the road have state minimum insurance. Therefore the higher the coverages you buy, the better off you may be. One option for additional coverage is to purchase an “umbrella” policy which adds onto your other insurance policies such as your house, car, motorcycle, etc., over and above the limits on those underlying policies. In the context of motorcycles, your motorcycle policy will be the “floor” with the umbrella going up to as high as $500,000/1,000,000 or more. Also, you can have underinsured and uninsured motorist included in the umbrella. Keep in mind that all these things must be written in the policy. In order to obtain an umbrella policy, the insurance company issuing such policy will most likely require that your motorcycle (or underlying) policy have certain limits that are generally much higher than state minimum limits.
Health Insurance
If you work and have health insurance through your employer, you may have various coverage benefits available to you if you get hurt on your motorcycle. If you do not have health insurance through your employer, you will want to obtain it through the private market or through the public sector depending on your circumstances. Your health insurance policy, regardless of who pays for it, may likely have a high deductible that you have to pay out of pocket prior to any benefits being paid. Accordingly, while it may not be of much benefit for minor injuries (of a few thousand dollars, for instance), you may have significant coverage available to you for medical expenses in the event of substantial injuries.
Keep in mind that your bills are not paid piecemeal by the UM or UIM policy and will only be paid (if at all) after a settlement or award is given. Your PIP benefits and health insurance benefits will generally be paid in the meantime (i.e., prior to the claim being formally resolved) provided that the expenses are deemed to have been reasonably and necessarily incurred. And for PIP, generally such benefits are only available up to one year from the date of the accident (and only up to the PIP limits defined in the policy). Also, you should know that, in most situations, your health care insurer is entitled to be reimbursed for what it spent on your medical care; and to the extent your health care providers have not received compensation, they would also have liens against your recovery. Your personal injury attorney may be able to negotiate those lien amounts down.
Life Insurance
Check to see whether you have a life insurance policy in place or available to you through your employer. If so, make sure that you have properly named your beneficiary and that the amount of the policy is satisfactory for your situation. Make sure your beneficiary knows he/she is the beneficiary under the policy. As most employer-provided life insurance is for a fairly low amount, you should consult with a qualified life insurance agent who can take a look at your particular circumstances and recommend the type of policy and policy amount that would most appropriately protect your family and/or other designated beneficiary in the event you die while the policy is in effect.
Short Term and Long Term Disability & Supplemental Insurance
Check with your employer regarding their Short Term and Long Term Disability plans available to you. If such coverage is not available through your employer (or you determine that it is insufficient in amount and/or duration), you should consider whether it makes sense to purchase it through the private insurance market. Depending on the nature of your injuries and your work situation, these types of plans might be enough to adequately cover a portion of your wage loss for a period of time (defined by the policy) in the event you are injured in an accident and can no longer work as a result. These policies can differ greatly in what they cover. For instance, whereas one disability policy may cover wage loss if you cannot return to the exact job you held at the time of the accident, another policy may provide benefits only in the event you cannot work in any line of work.
Further consideration should be given to supplemental insurance such as AFLAC which may cover various household and other expenses. For example, AFLAC may pay a lump sum depending on the type of injury sustained. Even if you have medical coverage or a disability plan, AFLAC will generally pay regardless of fault, provided of course that you are not otherwise excluded from the policy; for example, that you were not intoxicated at the time of the accident, racing at the time of the accident, etc. Since monthly household expenses continue even when one gets hurt, this type of insurance can be a great help with filling in the financial gaps that may occur following a motorcycle accident.
Accidental Death & Dismemberment
This type of insurance may pay benefits in the event you die or have specific bodily losses in an accident. This insurance is typically cheaper than life insurance; but as always, make certain to investigate which type of policy is right for you and your family. Payment is up to a set total and is usually paid in excess of any other insurance, i.e., after all other available insurance benefits have been tapped into and paid. Your employer may offer this type of insurance. Also, your union or professional associations may have this type of insurance coverage available to you. You can buy AD&D on your own if it is not available to you by one of these means. These plans will generally pay regardless of fault, although check your policy closely for exclusions.
Medical Emergency Transport
Motorcyclists tend to ride in areas beyond the reach of a typical ambulance. When this happens it is not unusual for a helicopter to be called in to deliver you to the nearest hospital. This can be very expensive and is not covered by most health plans or motorcycle policies. Helicopter ambulance transportation can be purchased on a regional basis. There is a link on the MTAF website for a service in the Northwest (Life Flight Network) that costs just $45 per year. Check your locality for something similar. These plans may be honored by other networks across the nation. Be sure to check your policy to ensure you have national coverage.
Social Security Disability Benefits
Depending on your circumstances and financial condition, you may be able to obtain SSDI benefits from the federal government as a result of injuries sustained during a motorcycle accident. Be sure to explore this potential option if you find yourself in this situation and think you might be eligible.
If you have a passenger
Take a good look at your motorcycle policy (and umbrella policy) to see how well your passenger is covered in the event of an accident. If your passenger is hurt in a crash with another vehicle, your passenger may be covered by the insurance for the at-fault driver; and to the extent that is not enough (or is non-existent), your passenger may be able to make a UM/UIM claim against you. Your passenger can also sue you for damages if you are deemed negligent, regardless of whether another vehicle was involved in the accident.
I wrote this for the Motorcycle Travel America Foundation because I felt that all riders need some guidance regarding insurance coverage. Insurance coverage is often overlooked as too costly and cumbersome. It doesn't need to be that way. Best be educated on your choices and go from there. I hope these recomendations are helpful to you. Thanks goes to Sam Hochberg, a Portland personal injury attorney and the Cary Cavenau, an attorney who is a member of the board for the MTAF for their invalueable help with this project. They were an immense help in getting this information together in a coherent format.
Mike Friend
7/4/14