Motorcycle Accident Insurance: What You Should Know
OK grasshopper. You paid for motorcycle accident insurance, and now you had an accident. You faithfully made payments month after month, and you never thought about much, except what the policy cost. You are about to find out why it makes a difference who you bought your insurance from. An insurance policy is often called “a contract of exclusions”. You are going to find out why.
Most riders take only moments to pick out an insurance policy. They either purchase a policy through the dealer, online, or wherever they get the rest of their insurance policies, The conversation often starts with “what insurance do I need” and “what will it cost?”. These questions are not enough, and they set you up for real failure.
Before we get into today’s post, let’s do the briefest review of the policies.
You are required to have “liability” coverage that meets or exceeds your state’s minimum limits. In California, this means you need to have at least $15,000 in coverage for any one person you may injure, and a total of $30,000 for everyone injured in any one accident. There must also be at least $5,000 for any property damage, such as a car, that you damage. These limits have been the same for awhile, despite steady inflation. Liability coverage does not pay you in an accident, it only pays the people you hurt or injured. The benefit to you is that you don’t have to pay for the damage. The biggest benefit is to the person you hit, since they get the payments.
Uninsured Motorist Coverage
When you buy insurance, they are required to either offer you “uninsured motorist coverage” or have you sign in writing that you waive this coverage. Notice that this is very unusual, because if you don’t want it, you have to say so in writing. Uninsured motorist coverage protects you when someone makes a left hand turn in front of you, or a lane change into you, or whatever, and you get hurt. If they don’t have insurance, or if it is a “hit and run”, your own company pays you. This coverage acts like liability insurance for the other guy, who failed to buy it. If you have higher limits on your uninsured motorist coverage, and the other driver has a small policy, they will pay over the other guy’s limits, up to your uninsured motorist limit. Notice that your carrier suddenly has incentive to fight your claim, just like the other driver’s insurance. Not surprisingly, that is exactly what they will do. Fight your claim, just like the other guy’s insurance would have done.
This is important coverage. In California, almost 15% of all drivers on the road do not have insurance, even though it is required in order to register a vehicle. An even greater number have minimal coverage. $15,000 may not even get you through the emergency room.
Despite the fact that this is the most important coverage FOR YOU in your policy, motorcycle dealers routinely get riders to sign the uninsured motorist coverage waiver. For less than that custom exhaust, you could protect yourself against the 15% of uninsured drivers on the road. Without much discussion, the dealer steers you away from this.
This coverage is quite reasonably priced, so you aren’t doing yourself a favor when you agree not to buy it. Some insurance carriers have the uninsured motorist waiver printed on the application form. This is a good deal for you, and a bad deal for them.
Medical Payments Coverage
You can also buy “medical payments coverage” which will pay medical bills “arising out of the use” of your motorcycle, or if you are hit while a pedestrian. This coverage can be used to pay your insurance deductibles, or it will pay your bills, up to a limit that is usually smaller. $5,000 maximum is common. Some policies go higher. For example, $25,000.
With this background, let’s get back to your accident claim.
Insurance Companies: What You Should Know?
Policies tend to have similar language, and there is standard policy language. This DOES NOT mean that all companies are the same. If you only buy based on price, you set yourself up for a lousy carrier, who will fight you every step of the way. Some companies are better than others. This is just like buying cheap airline tickets, or blindly booking a cheap hotel. Suddenly, you are in a cramped seat on a plane that is sitting at the gate, or you are in a shabby room, with a view of the ductwork. Insurance companies are the same.
Currently, Farmer’s Insurance and Allstate Insurance are two examples of companies that my motorcycle clients find horrible to work with. Farmer’s does business under a variety of names. They use “Foremost” for many of their motorcycle policies. Allstate also uses other names. For example, “Esurance” is an Allstate Company.
When you buy a policy from one of these companies, and you are in an accident with an uninsured motorist, or if you have medical bills and medical payments coverage, you have to go to your own company. If they are slow pay, or delay your claim, you are the one to suffer.
What We Can Do?
Now we can pull this together. If you have an accident, you are going to look to your own insurance carrier if the other driver has no coverage, and possibly a small policy. You are going to look to your own carrier if you have medical payments coverage, to help with your medical bills. If you purchased coverage for your motorcycle, you are going to ask your own company to pay for repairs or replacement. They can either pay your claims, or fight and delay payment. If you have a bad insurance company, this will be a bad time to find out what that means. You probably are missing some work, and there is never a good time to have these kind of expenses. If you have injuries, you are not at your best to fight an insurance company. If you are unable to work, you are not at your best to hold out while you fight with your insurance company.
Go online, and figure out what you are dealing with BEFORE you buy insurance for your motorcycle. Google “Allstate sucks”, or “Farmer’s Sucks”, or “From Good Hands to Boxing Gloves”, and read reviews and rankings of the various companies. You should be buying insurance to take care of claims when there is an accident. Since you are buying claims service, make sure that you have the best chance of getting good service.
Motorcyclists are often treated as a minority. Look for those insurance companies that treat riders well, not those who shuffle them off.