JASON'S TOP Ways That Skimping On Motorcycle Insurance Could Cost You

As Seen in Thunder Road Magazine

Authored by Jason, The Motorcycle Lawyer

 

As most loyal readers already know, these monthly articles are just one method my team and I use to pass along motorcycle-relevant information about the law, insurance, riding techniques, and maintenance; often, I am passing along information my team and I come across while fighting for injured motorcyclists and their families. And, while I have discussed insurance in previous articles, I wanted to talk about a specific aspect of insurance this month and explain a few of the ways that buying only the bare minimum in motorcycle insurance may save you money on the outset, but could cost you in the long run.

 

First, a little background: My client was injured by a negligent motorist who was driving without insurance on the vehicle ("the uninsured driver"). As I have explained in previous articles focusing on motorcycle insurance, you only need to carry the basic 20/40 bodily injury coverage in order to be legal here in Michigan. That coverage provides up to $20,000 per person, or up to $40,000 for any number of people the motorcyclist may injure by riding negligently… which is not what happened in this case, and not what this article is about. I mention it only because in previous insurance articles, I also recommend having at least $100,000 in bodily injury coverage to protect yourself. (Keep in mind, this does not include the additional $20,000 per person in medical coverage motorcyclists who wish to ride without a helmet are required to carry.)

 

Having the basic 20/40 bodily injury coverage also entitles motorcyclists to no-fault benefits, but only if a motor vehicle is sufficiently "involved" in the crash. Michigan's no-fault system allows motorcyclists injured in a crash with a motor vehicle to get lifelong medical bill coverage for injuries related to the crash, as well as wage loss, household chores, and medical mileage reimbursement; again, this only applies if a motor vehicle is involved in the crash.

 

My client did not have uninsured or underinsured motorist coverage. This type of policy kicks in when the motorcyclist is hit by a negligent driver who has no insurance, or not enough, to cover the rider's injuries. Apparently, my client "heard from someone" (presumably not an insurance agent or an attorney) that he didn't need to purchase uninsured/underinsured coverage because the insurance policy on his car would cover him in that type of scenario. He was hoping to save a little money on his motorcycle insurance by avoiding what he thought would be redundant coverage.

 

In fact, my client’s uninsured/underinsured policy for his car has a specific exclusion disallowing him from using his auto insurance policy to cover the injuries he received in his motorcycle crash. It is referred to as the "other owned vehicle exclusion", and it works like this: if you own two (or more) vehicles, you must insure each vehicle as fully as you would want to be covered in the event of a crash when driving that particular vehicle. In other words, you must purchase as much coverage as you want on a per-vehicle basis.

 

Now, I'm not usually one to side with insurance companies, but I actually believe this rule makes sense. After all, the insurance company wants to be sure that they have quoted and received payment for a premium consistent with the amount of risk they have assessed. Risk is assessed differently for each vehicle; if you have a Honda and a Ferrari, you can bet the insurance company will assess higher risk, and thus higher premiums, to the Ferrari. To put it another way, why would any insurance company allow someone to purchase uninsured/underinsured coverage for their minivan, at a premium of $50, then have it cover their motorcycle, convertible, and teenage son's pickup truck? If each of his vehicles were assessed the same way, the policy holder should have paid at least $200 for four policies for four vehicles, not $50 for one policy for four vehicles. Insurance companies are not in the business of losing money, so it shouldn't come as a surprise to learn that they specifically exclude the policy holder (and often their family members) from coverage if the policy holder is operating or riding in another vehicle owned by the policy holder. Your Honda's policy does not cover you in your Ferrari, and your motor vehicle insurance does not cover you on your motorcycle.

 

Writing about other owned vehicle exclusions got me thinking about other insurance questions we receive regularly; here is a list of four common questions we hear from clients:

 

1 - "Should I cancel my motorcycle insurance during the off-season?": I always recommend against this. Your homeowner's policy will not cover your motorcycle. If something happens - fire, flood, theft, rodent damage, you can't use your homeowner's policy to cover it. I've written about this a few times before; to read more, visit www.MotorcycleLawyerMichigan.com/80.html to learn more.

 

2 - "How do I get my motorcycle repaired after a crash?": To get your motorcycle fixed, you need collision coverage, which will cover the cost of repairs or pay a fair market value for a motorcycle that is totaled. However, this may only apply to stock parts; see 3 for information about custom work and accessories.

 

3 - "Will my insurance pay for custom work or accessories?": As usual, the answer here is "it depends". Collision Coverage normally only covers stock parts of the motorcycle; custom parts, paint, or accessories may be excluded. Check with your insurance agent; be very specific about what you want covered, and be sure to ask specifically if your policy or rider covers custom work.

 

4 - "Do I need special insurance to ride without a helmet?": If you are over 21 AND have had a motorcycle (CY) endorsement for at least two years OR passed a certified rider training program to get your endorsement, you can choose to ride without a helmet as long as you have at least $20,000 of first-party medical benefits coverage; The same goes for any passengers on your motorcycle. In other words, to ride without a helmet, you need $20,000 in first-party medical benefits for each person on the motorcycle; that coverage has to be separate from VA, Medicare, or other healthcare insurance you already have.

 

Insurance is complicated and full of exceptions and exclusions; that is why I always tell people that the answer to any question about a motorcycle wreck, liability, insurance coverage, the law, and so on is always "it depends": The facts of the crash, who owns the vehicle(s), where the crash occurred, what address is listed on the insurance policy, and a whole multitude of other factors come into play when assessing how the law applies to the crash and what insurance coverage is available to help the injured victim(s).

 

Nobody can explain every aspect or answer every question about insurance in a single article; If you have questions about motorcycle insurance, contact your insurance agent. If you have questions about Michigan's motorcycle laws, contact me. You can also follow me and my team on Facebook to get the latest information about Michigan's motorcycle laws, see upcoming motorcycle events in your area, and get access to motorcycle awareness information and materials: www.Facebook.om/TheMotorcycleLawyer.