Issue #9: Shifting Seasons

CYA: Bicycle Law’s insurance guide for cyclists

If you’re reading this, it’s fair to assume you’re a cyclist. It’s also a good bet you have health insurance, a renters or homeowners insurance policy, and (if you have a car) auto insurance. But do you know if that’s enough to cover you if you get hurt while riding? What about if you accidentally hurt someone else?

In this guide, we’ll provide an overview of the types of insurance we think are important if you’re going to be on the road. Note: This article doesn’t go into detail on health insurance or disability insurance — both of which we strongly recommend for everyone.

And if you’re too busy to read the whole guide, we’ve got some key takeaways at the end. We promise skipping to it won’t hurt our feelings; we’re happy as long as folks get the coverage they need.

Auto insurance

When we consult with an injured cyclist, one of the first questions we ask is whether they have an automobile insurance policy, even if they don’t drive a car. Why? Example: In California, an estimated one in three drivers drive either without insurance (despite it being against the law) or the legal minimum of $15,000 per person, per incident. This is barely enough to cover the cost of an ambulance ride and emergency room visit, let alone further treatment.

This is where UM/UIM (uninsured/underinsured motorist) coverage can save the day. A good UM/UIM policy will cover you in most situations where you make contact with another vehicle. This means if you’re hit while riding your bicycle, walking across the street, or even riding in someone else’s car, your UM/UIM policy will cover you. Check your level of coverage by looking at your auto insurance declarations page. It’s probably too low, and we highly recommend buying a bigger policy: UM/UIM coverage is the cheapest disability insurance you can get.

Living car-free? Most auto insurance companies offer non-owner operator policies. These too can be very inexpensive and worth checking out. (Example: the Coopers renewed a policy with USAA for $1,000,000 of auto coverage and UIM coverage for only $400 in 2020.)

Some caveats:

• Hit-and-runs: In the case of a hit-and-run, most policies require the injured person to make a police report or report the incident to the insurance company within 24 hours of the incident; otherwise, the incident will not be covered.
• Motorcycle UM/UIM: Moto policies don’t have the same type of UM/UIM, and their coverage is typically expensive. If you have a motorcycle but no car, it’s probably more cost-effective to add a non-car owner policy that insures your UM/UIM on your moto policy.
• Stacking: In some states, the UM/UIM coverage “stacks” on top of the driver’s policy. If it stacks, you can obtain a maximum of the driver’s policy plus your UM/UIM coverage. (California is not one of those states; Oregon is.)

Renters or homeowners insurance

Why is this type of insurance important while riding? Because you may inadvertently hurt another rider or pedestrian. When that injured person makes a claim against you, you’ll need something else. Your auto policy’s liability coverage only works when you’re driving a car.

That something else is a renters or homeowners policy, also sometimes known as a personal liability policy. While they typically cover the threat of loss or damage to possessions or one’s home, they also provide liability insurance if you accidentally hurt someone. The liability coverage limit determines the maximum your policy will pay for a claim. We also recommend supplementing this with the following for the proverbial rainy day.

Umbrella or excess insurance

Umbrella insurance, also known as excess insurance, acts as a secondary layer of insurance over your auto and renters or homeowners policies. It only comes into play when an injury exceeds the underlying policy — something really big and serious. And because it’s rarely deployed, it’s surprisingly affordable.

Why do you need it? Because mistakenly hurting someone can be incredibly expensive. Umbrella policies typically require $250,000 as the minimum liability limits for your auto and renters/homeowners insurance. Umbrellas are usually between $1 million and $5 million in coverage. When buying, consider how much you want to protect, not how much you want to pay.

Key takeaways and actions

Ready to make sure you’re covered? Here’s what to do: Open your calendar and pick a day sometime within the next month. Find a time with a two-hour window and make yourself a time block: “Review insurance with agent/broker.” (It will probably take less time than that, but carve it out anyway; this is important stuff.) Here’s what to talk about:

• Auto insurance: Get UM/UIM limits that will be enough to cover you if you get hit. $500,000–$1M is recommended. Even if you don’t own a car, purchase a non-owner operator policy.
• Renters or homeowners insurance: AKA personal liability policy to protect you if you hurt someone while riding. $250,000–$300,000 recommended, usually enough to qualify for an umbrella policy.
• Umbrella insurance: Your additional layer of protection in case you hurt someone really badly. Policies are typically $1M–$5M in coverage and very affordable.

Taking these steps will help make a huge difference for you or someone you love at some point in your life — not to mention offering additional peace of mind while you’re out riding.