As the 2012 riding season goes in to full swing, I want to take a moment to remind everyone on the road, motorists and motorcyclists alike, that to operate safely means to operate with awareness. It is that time of the year again when motorcycles are cleaned, polished, and readied to ride. It is imperative that motorcyclists both properly prepare for safe riding and ride aware during the season.
Aside from ensuring our motorcycles are looking good and in appropriate working order, properly preparing for the riding season should include making sure your insurance coverage limits will adequately protect you and your loved ones in case of an accident. Insurance coverage is too often a subject that comes up only after a collision occurs, at a time when it is too late to consider coverage. The essential part of an insurance policy for an injured motorcyclist does not come from the liability portion of the coverage, which covers the rider for damages caused by the rider’s own negligence, but rather from the under-insured or uninsured portion of the policy.
The liability portion of an insurance policy covers the operator of the motorcycle for damages caused by the operator when a collision occurs. Meaning, when the operator of a motorcycle has caused a collision to occur (is at fault) and has either damaged property or injured a person, the liability portion of the insurance policy covering the motorcycle deals with that.
The other part of your insurance policy that covers your motorcycle is the underinsured and uninsured portion. This covers the motorcyclist when they have been injured by another person causing a collision when that person is underinsured (there is not enough insurance coverage to compensate the motorcyclist for the damages sustained, or UIM for short) or uninsured (without any insurance coverage to compensate the motorcyclist for the damages sustained, or UM for short). This portion of your insurance policy (known as UIM/UM) is essential to understand because it is quite often the only means to fully compensate an injured motorcyclist when a motor vehicle causes a collision in which the motorcyclist is injured.
In the State of Connecticut, the law requires all operators (motorists and motorcyclists) to insure their vehicles with a minimum limit of $20,000/$40,000 (or 20/40 for short) in liability coverage. This means that in case an operator causes a collision in which a person or people are injured, the operator’s insurance policy will cover all the damages caused up to a total of $40,000.00 and that no one person injured in the collision can collect more than $20,000. This may not seem significant now, but it will as we move on.
In Connecticut, more people who operate a motor vehicle have the minimum insurance limits of 20/40 than not. One out of every five drivers in Connecticut has no insurance on their vehicle at all, however. 20/40 is the most popular because it is the least expensive coverage a Connecticut resident can buy and the minimum requirement to operate a vehicle legally on roadways. To a motorcyclist who is injured by a collision caused by a motorist with a 20/40 policy, or worse yet, no insurance coverage, it can be a nightmare.
As we all know, when a car and a motorcycle collide, the chances are the motorcyclist is going to suffer the majority of the injuries, and most of the time, the injuries are very serious. Many times, these collisions are caused by motorists who are just not paying attention and keeping a conscious lookout for motorcycles. If the vehicle is at fault is covered with the standard 20/40 coverage, or worse yet no coverage at all, the injured motorcyclist’s own insurance coverage is the last source of compensation for the motorcyclist to recover medical bills, lost wages and support for the future. It is imperative that motorcycles protect themselves with proper insurance coverage for this very reason. Under circumstances where a rider is seriously injured, $20,000 (from a 20/40 policy on the vehicle responsible) is not likely to be anywhere near the amount of money needed to get that rider fairly compensated to recover what was lost.
Just imagine if the vehicle at fault has no insurance. You see, the way that insurance coverage works in Connecticut is this: if a motorcyclist has coverage of 20/40 for underinsured and uninsured motorist coverage (UIM/UM) and is injured in a collision with a motor vehicle with 20/40 coverage, the motorcyclist cannot collect both polices for $20,000 each (remember that in a 20/40 policy, no one person can collect over $20,000). In Connecticut, if the injured motorcyclist does collect from the insurance carrier who covered the vehicle which caused the collision, the motorcyclist’s own insurance company gets a credit for the amount the motorcyclist received from the from the insurance carrier who covered the vehicle which caused the collision.
So, let me use an example to illustrate. A motorcyclist who has 20/40 coverage for UIM/UM gets into a collision caused by a vehicle with a 20/40 liability policy and is seriously injured (as is too often the case). Now, the motorcyclist collects the $20,000 from the insurance carrier who covered the vehicle which caused the collision. Let’s suppose there are $95,000 in medical bills alone from the injuries the motorcyclist suffered in the collision, not to mention lost wages or future support. So, clearly there would be insufficient compensation from the motorist who caused the collision, so a claim under the motorcyclist’s underinsured (or UIM) policy would be made. Now, if the motorcyclist’s underinsured (or UIM) policy was also a 20/40 policy, the motorcyclist cannot collect a penny from their own UIM policy, because their carrier gets a credit for the $20,000 the motorcyclist received from the from the insurance carrier who covered the vehicle which caused the collision. So, if the motorcyclist has only a 20/40 UIM policy, $20,000 from the vehicle which caused the collision, the credit for $20,000 the motorcyclist’s own carrier going towards the UIM recovery makes the recovery from UIM $0.
However, if the motorcyclist carried $100,000 in UIM/UM or, better yet, $300,000 or even a million in UIM/UM coverage, the motorcyclist would probably have been able to be fully compensated for all of the damages caused. Just think, if in our example, the motorcyclist had $100,000 in coverage in UIM/UM (called a 100/300), the recovery would have been $100,000, not limited to only $20,000. This is because the $20,000 from the vehicle which caused the collision, the credit for $20,000 the motorcyclist’s own carrier gets towards the UIM recovery makes the recovery from UIM $80,000 for a total of $100,000.00 (collect 20k, 100k UIM policy gets a credit for 20k, leaves 80k from UIM. 20k + 80k is 100k recovery). The recovery from UIM goes up as the limits for the policy are increased. You can do the math easily. If you have $300,000 single limit policy in our example, you could recover $280,000 from your own carrier under the UIM portion of the policy (if the injuries warranted that amount) for a total of $300,000 (collect $20k, $300k UIM policy gets a $20k credit, leaving $280k in UIM, so $20k + $280k is $300k). The more UIM protection you have as a motorcyclist, the more protection you will have from the injuries you could sustain by the fault of another who has little to no insurance to compensate you and your family. By the way, the example we have used here could be used for a vehicle with no insurance, as well; in that scenario, the motorcyclist collects nothing from the vehicle which caused the collision and solely relies on the UM (uninsured motorist coverage, which is identical in value to the UIM coverage).
I want to tell you about a relatively inexpensive way to raise your UIM coverage by double! I have been telling this to my clients for years, and I utilize it myself. First, check your coverage and raise it to 100/300 minimally (I suggest 250/500 minimally). Now, once you have raised your coverage to 100/300 minimally (or higher as I suggest), just ask your insurance agent to double your UIM/UM coverage. It costs nothing (literally should be dollars more a month) compared to the protection you (and your
passengers) get from vehicles that have little to no insurance. So, if you have 100/300 in liability coverage, usually the UIM/UM coverage mirrors the liability coverage (so 100/300) unless you double the UIM/UM to 200/600!
That means you have $200,000 recovery per person not to exceed $600,000 in total for all people injured on the bike. That is a lot more coverage per person on the bike for a small increase in premiums. (Remember, the higher the liability coverage, the more you can double up to. For instance, if you got 250/500 in liability and double up the UIM/UM, you have $500,000 per person and $1,000,000 in total!) I tell this to people because I see too many cases where innocent motorcyclists are severely injured by a negligent motorist and there is simply not even close to enough insurance coverage to get the motorcyclist properly compensated for the extent of their injuries. It can be devastating. So, although we don’t like to talk about going down or getting into an accident, it is better to be protected in case something happens rather than risking that nothing will happen.
A very wise man who rides and also happens to be an attorney once told me that people with a lot of coverage seem to be the ones who never get hurt. Ironically, it’s true in my experience and with my clients. So, to protect yourself and avoid the nightmare, double your UIM/UM coverage.