This is a topic that I’ve written about before and that I can’t write about enough. It’s dry, it’s a bit legalistic, and it includes the dreaded word “insurance,” but please take a minute to read because it concerns the most important purchase you’ll ever make as a cyclist.
You may think that if you get hurt in a bike-car collision you’ll be able to recover money from the negligent driver as long as the driver is insured.
What you may not know is that in California the minimal insurance coverage for collision liability is $15,000. What you also may not know is that 85% of the drivers on the road have this minimal coverage.
This means the odds are overwhelming that the driver who hits you will have to compensate you for a maximum of $15,000 and THAT’S IT. Once your expenses exceed the $15k that most drivers carry, you’re done, even when you’ve suffered injuries totaling hundreds of thousands of dollars.
There is, however, a very cheap and very effective way for cyclists to protect themselves and their families from cagers who carry minimal insurance. It’s called uninsured motorist and underinsured motorist coverage (UM/UIM), and it comes standard with every auto insurance policy unless you specifically decline the coverage. [Note: NEVER, EVER, EVER, EVER DECLINE THIS COVERAGE. You may think you’re saving a few bucks but in reality you’re declining the best and cheapest insurance you will ever buy as a cyclist.]
Few cyclists know that UM/UIM coverage on their own auto liability policy exists, and even fewer know that it covers them in a bike-car collision when they’re cycling and get hit by a motorist. This means that if, for example, the driver’s policy tops out at $15k, you have the legal right to turn to your own UM/UIM insurance for the remaining expenses or damages above and beyond the $15k paid out by the driver.
So far, so good, but there’s a catch: If you’re like most people, your UM/UIM coverage is also minimal, often only $15k or $25k. Since you have to deduct the amount already paid out by the offending driver from your own UM/UIM claim, if you have minimal UM/UIM coverage the additional recovery is very small or zero. (15k UIM coverage – Offending Driver’s $15k liability coverage = 0 additional recovery.) It’s not uncommon at all to see a cyclist who has a responsible liability policy for $500k, but a measly $15k or $30k for the UM/UIM portion of his policy.
In other words, the cyclist is being very responsible with regard to paying for damage he might do to others, but completely failing to make adequate provision for the damage that some uninsured drunk or underinsured deadbeat may do to him.
There’s a great solution, though. You can increase your UM/UIM coverage so that it equals the amount of your liability coverage for only a small increase in your monthly premium. Although your UM/UIM coverage is barred from exceeding your liability coverage, as an example, if you have $500k of liability insurance but only $25k in UM/UIM, you can bump up your UM/UIM from $25k to $500k for only a few bucks a month. If you only have $25k or $50k of liability insurance to begin with, you have a problem.
If you ride a bike and have liability coverage of anything less than $100k you are grossly underinsured. I’d say that a barely adequate UM/UIM policy should be no less than $500k. If you have a family nothing less than $1M is enough. If you can’t afford $1M in liability/UM/UIM coverage, sell your extra bike or extra set of carbon wheels. It is the best money you will ever spend as long as you ride a bike, and obviously it’s exactly the kind of protection you want if you’re driving. UM/UIM coverage also kicks in if you get hit by a car while you’re walking.
There are certain insurers such as Mercury who will not offer a policy for more than $250k. Run from these insurers and go with an insurance company that will sell you an adequate policy. Chubb, Allstate, AAA, State Farm, Farmers, and Tokio Fire Insurance and Marine are just a few of the insurers who offer adequate policy coverage. I’ve found Tokio Fire Insurance and Marine to have the cheapest rates with the best coverage and the best claims responses.
For the sake of yourself and your family, take a minute to look at the declarations page of your insurance policy, check liability limits and the UM/UIM coverage, and then call your agent or go online and raise it to the max. This is something you can’t afford to put off.
The other huge benefit to turning to your UM/UIM coverage in the event you get hit is that if you’re forced to use it because the driver’s coverage was inadequate, you actually wind up with a larger recovery than you would if you were making a claim against a driver with adequate coverage.
This is because your health insurance provider will have a lien against any recovery you get from the driver’s insurance. In other words, if Anthem pays your doctor $15,000 in medical bills, Anthem will be able to recover what it paid your doctor from the insurance proceeds you get from the offending driver, effectively reducing the amount you ultimately receive by the amount of their lien. However, when the recovery comes from your own UM/UIM motorist policy, the health insurance provider will have no claim on those proceeds except in a very few limited instances.
Call your insurance agent and raise your limits now. I’ve seen too many injured cyclists with six and seven-figure injuries who are hit by uninsured or underinsured motorists and whose own UM/UIM coverage is only for a few thousand bucks. Don’t be that cyclist!
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