Insurance Advice

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?

UM/UIM coverage

UM/UIM coverage is coverage within a comprehensive auto policy that provides insurance coverage against collisions with uninsured and underinsured motorists. 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. 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.

Every state requires motorists to carry some minimum level of insurance; this minimum level will vary from state to state. 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.

This is where your own UM/UIM policy comes in. 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.

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.

Health insurance

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 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.