In some countries, comprehensive insurance policies are available for cyclists; like their counterparts for motorists, these policies cover cyclists for risks such as liability, personal injury, uninsured motorists, and theft. Unfortunately, comprehensive insurance policies for cyclists are not available in the United States– perhaps they will be one day, but for now, cyclists who wish to be covered must piece together coverage from other policies. While cyclists are not currently required to be insured, they would be well-advised to consider at least one type of insurance coverage– UM/UIM– as essential. Other types of coverage, while not quite as essential, nevertheless provide benefits to cyclists comparable to some of the more common benefits of comprehensive auto insurance.
So what types of insurance are available for cyclists?
If you have an insured automobile, your insurance policy will include UM/UIM coverage. This coverage is there to protect you in case you are hit by an uninsured or underinsured driver. The reason this coverage is particularly attractive to the cyclist is because it covers you even if you are hit by an uninsured or underinsured driver while you are riding your bike.
UM/UIM coverage is coverage within a comprehensive auto policy that provides insurance coverage against collisions with uninsured and underinsured motorists. Most states require motorists to carry some minimum level of insurance; this minimum level will vary from state to state. For example, in California, the minimum insurance required is $15,000 per crash for bodily injury or death. This is an extremely low minimum insurance requirement and can easily be exceeded in a car-on-bike crash involving injuries to the cyclist. Even in Oregon, where the minimum insurance required is $50,000 per crash for bodily injury, the minimum can quickly be exhausted if a cyclist sustains serious injuries in a crash.
Regardless of the state, however, the minimum level of coverage is only sufficient to cover minor collisions; any collision that is serious enough to send you to the hospital will quickly run over the policy limits, sometimes within the first few minutes of the collision. Nevertheless, as long as a motorist carries this minimum level of coverage, the motorist is meeting his or her legal obligations. Because the minimum level of insurance is insufficient to cover anything more than a minor collision, motorists who do select this minimum level of coverage are termed “underinsured.” If you have the misfortune to be hit by an underinsured driver, the driver’s insurance policy may be insufficient to cover your injuries.
Some motorists, however, do not even carry this minimum level of coverage, usually because they cannot afford the premiums. Sometimes they cannot afford the premiums because they are in reality too poor to afford automobile ownership; sometimes they cannot afford the premiums because their poor driving record has resulted in high premiums that they cannot afford. Whatever the reason, these motorists are uninsured, but nonetheless continue to drive. If you have the misfortune to be hit by an uninsured driver, there may be no insurance policy to cover your injuries.
In cases involving an underinsured driver, your UM/UIM (“Uninsured Motorist/Underinsured Motorist”) coverage on your own auto insurance policy (and now available in comprehensive bicycle insurance policies) can step in once the driver’s insurance policy is exhausted. You would also use your own UM/UIM coverage if you are hit by an uninsured driver, or if you are the victim of a hit-and-run driver.
This type of coverage is so important for cyclists that it should be considered essential coverage. However, there’s a catch– a cyclist must have an automobile in order to purchase this type of coverage. If you have an insured automobile, your insurance policy will include UM/UIM coverage. The reason this coverage is particularly attractive to the cyclist is because it covers you even if you are hit by an uninsured or underinsured driver while you are riding your bike. For those cyclists who do not own an automobile, UM/UIM coverage will not be available. Many cyclists, however, do have an insured automobile. I routinely advise cyclists who do have an insured automobile to purchase the maximum amount of UM/UIM coverage available.
The price differential between minimum and maximum levels of UM/UIM coverage is not great; therefore, I routinely advise cyclists to purchase the maximum amount of UM/UIM coverage available. While nobody wants to be injured in a collision, having maximum UM/UIM coverage will provide you with some invaluable peace of mind should you be involved in a collision with an uninsured or underinsured driver.
One caveat—DO NOT accept a settlement from an underinsured driver’s insurance company without first getting approval from your own insurance company. If you do accept a settlement without the approval of your insurance company, your insurance company may decline to pay on your UM/UIM claim.
The reason for this requirement is that when you file a UM/UIM claim, you are authorizing your insurance company to “stand in your shoes” in pursuing a claim against the underinsured driver. If you accept a settlement offer from the underinsured driver’s insurance company, you are preventing your insurance company from pursuing their legal right to file a claim against the underinsured driver, and as a result, if you do not have permission to settle, your insurance company may legally refuse to pay your UM/UIM claim.
Personal Injury Protection or “Med-Pay”
In Oregon (and 36 other states), your automobile insurance policy is required to provide coverage for “Personal Injury Protection” (“PIP”), also known as “Med-Pay.” If you are injured in a car-on-bike collision, your own PIP coverage on your auto policy will pay on your injuries during the first year after the collision, up to the amount of PIP coverage on your policy. Because Oregon is a “hybrid” state that has some features of “no fault” states, and some features of tort liability states, if your PIP coverage is exhausted by your injuries (which is easy to happen with a $15,000 minimum policy coverage), you can file a claim against the negligent driver’s insurance policy. Filing a claim will mean negotiating with the insurance company about who was at fault, and ultimately, may mean filing a lawsuit against the negligent driver if you cannot reach a settlement agreement with the driver’s insurance company.
In California (and 12 other states), “PIP” coverage is available as an option on your automobile insurance policy, but is not required.
There are several benefits to having PIP coverage on your auto policy:
- Most PIP coverage will cover the cost of your medical treatment (this is the “Med-Pay” portion of your PIP coverage), your lost wages, and in a fatal collision, funeral expenses.
- PIP will cover you regardless of who is at fault in the collision.
- PIP will pay your medical bills much faster than they will get paid by the driver’s insurance policy.
- PIP will pay regardless of whether you win or lose your claim against the driver’s insurance company.
- PIP will pay when you have been injured by underinsured, uninsured, and hit-and-run drivers.
The disadvantages of PIP coverage are:
- PIP coverage is more expensive than other types of coverage on your policy, so people tend to select as little coverage as possible.
- In states where PIP is required, the minimum required coverage can be quite low (for example, $15,000 in Oregon), and that low minimum means your PIP coverage can be exhausted within the first few minutes of a serious crash.
- PIP coverage is likely to be many times less than the damages available in a claim against the driver’s insurance company, because damages for your pain and suffering are not covered by PIP. For example, if you are seriously injured and will live in pain for the rest of your life, your PIP coverage will not compensate you for that.
If you have health insurance, your policy will cover your medical costs for injuries sustained in a crash, even if the driver has insurance. This will relieve you of your immediate worries about your medical bills as you wait for your claim against the driver to be settled. However, be aware that if your medical costs have been covered by your health insurance, and you later recover damages for medical costs against the driver who injured you, you will be required to reimburse your health insurance carrier for medical costs it has paid. Therefore, you must take care when negotiating a settlement to be compensated for ALL of your medical bills.
Homeowners’s or Renter’s insurance
If your bike is stolen, and you file a claim with your insurance company, ownership of the bike transfers to the insurance company when it pays your claim; the bike is no longer yours.
If you have homeowner’s or renter’s insurance, you have coverage for two types of losses. The first type of loss covered is that resulting from your own liability. Under the personal liability coverage of your homeowner’s or renter’s policy, you are covered for your negligent acts that cause personal injury or damage to property.
The other type of loss that is covered under a homeowner’s or renter’s policy is theft of your bicycle. You will need to be careful to insure the bike for its replacement value, if you want to avoid a battle with the insurance company over replacement value vs. depreciated value. If you do file a claim, there will be a deductible (which will be paid by a lock manufacturer with a dollar-amount guarantee if you register your lock), and your premium will probably rise. Thus, you will need to use your discretion—for a high-dollar, high-end bike that would be difficult-to-impossible for you to replace yourself, it may make sense to file a claim when your bike is stolen. For low-value, lower end bikes that are more easily replaced, it may make more sense to absorb the loss yourself.
If your bike is stolen, and you file a claim with your insurance company, ownership of the bike transfers to the insurance company when it pays your claim; the bike is no longer yours. If you spot it on the street, you can certainly assist the police in recovering it, but it does not belong to you. It belongs to the insurance company. Similarly, if it is recovered by the police, it belongs to the insurance company. Once you have been paid for a stolen bike, if you want the recovered bike back, you will have to buy it back from the insurance company.
For more information
Negotiating with insurance companies can raise complicated issues that pose potential pitfalls for the cyclist. Before you agree to any settlement of your claim, be absolutely certain that you understand the settlement and all of its implications. If you need professional advice, an attorney experienced at handling insurance claims for cyclists can provide invaluable assistance.
For a free consultation with bicycle lawyer Bob Mionske, contact bicyclelaw.com