Insurance Dos and Don'ts

As Seen in Midwest Motorcyclist Magazine

 

 

 I recently worked with a client who was injured by a negligent driver, and whose case was complicated because of insurance issues. My team and I get a lot of calls from motorcyclists who have been in a wreck and who have questions about their insurance coverage.  Remember, different states have different laws when it comes to insurance, and the information contained in this article applies specifically to Michigan motorcyclists. However, the gaps my team and I have identified could apply to any Midwest rider, so it's best to review the article and contact your insurance agent to ensure you have enough of the right kind of coverage. 

The client I am referring to was injured when hit by a negligent driver, who also happened to be uninsured ("the uninsured driver"). Even though driving a motor vehicle or motorcycle without insurance is illegal in Michigan, it's a very common problem. Here in Michigan, motorcyclists are required to carry basic "20/40" bodily injury coverage, which provides a maximum of $20,000 per person, or $40,000 for any number of people the motorcyclist may injure by riding negligently. Now, in this particular case, my client did not injure anybody by riding negligently, but I mention it just to provide a framework to understand what is required. Also, it is important to note that motorcyclists who wish to ride without a helmet in Michigan are required to carry an additional $20,000 per person in first-party medical coverage (as well a s meeting other criteria). 

Michigan is a no-fault state, and having the minimum 20/40 bodily injury coverage means motorcyclists can be entitled to no-fault benefits, provided a motor vehicle is "involved" enough in the crash. When applicable, no-fault benefits provide lifelong medical bill coverage for crash-related injuries, wage loss payments, household chores coverage, and reimbursement for mileage used to drive to and from medical appointments. The requirement that a motor vehicle be "involved" in the crash can make it difficult for some motorcyclists to get no-fault benefits. So, I recommend carrying a minimum of $100,000 in bodily injury coverage to protect yourself. 

Back to my client, who as I mentioned had only the minimum 20/40 bodily injury coverage; he did not have uninsured or underinsured motorist coverage. These types of policies can apply when the motorcyclist is injured in a crash with a motorist who either has no insurance, or whose insurance is not sufficient to cover the motorcyclist's injuries. My client explained that he heard from a fellow rider that he didn't need to purchase uninsured/underinsured coverage because the insurance policy on his car would kick in to cover him if needed in this type of scenario. 

My team and I actually get quite a few calls where motorcyclists have been shafted because of incorrect insurance information they "heard from someone". A lot of times, people are looking to save a bit of money, and naively think they are avoiding redundancy by passing on extra insurance. However, this often ends up costing them in the long run. In this case, whoever my client received his information from misunderstood a portion of his vehicle insurance policy. 

In fact, most auto insurance policies have a specific exclusion that disallows the policyholder from using their auto insurance to cover a motorcycle incident. It's called the "other owned vehicle exclusion", and it works on a simple premise: if a driver owns two or more vehicles, they must insure each vehicle to provide as much coverage as you think you would need in the event of a crash when driving that particular vehicle. 

In other words, insurance policies are offered on a per-vehicle basis, which makes sense: insurance companies deal in risk, and risk is assessed differently for each vehicle. The companies want to make sure that they have quoted and been paid premiums consistent with the risk they have assessed. Why would insurance companies allow vehicle owners to pay one premium for coverage on multiple vehicles? They are in the business of making money, not losing it, and they could potentially lose a lot of money if people were able to purchase a single policy to cover multiple vehicles. As The Motorcycle Lawyer, I have seen the way insurance companies try to rip off clients, but I think "other owned vehicle exclusion" clauses actually make sense, and it shouldn't be a surprise to learn that policy holders (and family members, usually) are exempted from coverage when operating or riding in another vehicle owned by the same policyholder. The policy on your used 1998 Subaru wouldn't apply to your brand new Ford F150; similarly, the policy you hold for your car won't apply to your motorcycle.

Here are a few more recommendations based on the most frequent calls we get about insurance:

DO talk to your insurance agent to make sure that you have sufficient coverage on your motorcycle. Your agent can tell you the minimum legal requirements, and also make recommendations about additional coverage you may want in order to feel secure that if something happens, you're covered.

DO NOT take insurance advice from people who are not experts in insurance. Insurance and the law are filled with complicated rules, exclusions, and exceptions, making it easy for a non-expert to make a mistake or misunderstand something. 

DO keep your bike insured year-round, even when it's stored for winter. Your homeowner's policy does not cover your motorcycle when it's stored on your property; if your garage catches fire, or your bike falls, or it gets stolen, you're not covered. Keep your motorcycle insurance policy active during the off-season; to learn more, visit www.TheMotorcycleLawyer.com. 

DO NOT assume your bike is covered just because you are. If your bike gets wrecked in a wreck, you will need collision coverage to get it fixed. Collision coverage will pay for repairs or provide a fair market value if your bike is totaled. That said, these policies often only apply to stock parts; you may need more coverage for custom work, including paint, parts, and accessories. When talking to your insurance agent, ask very specific questions about what is, and what is not, covered, and ask specifically if your policy or rider will pay out for custom work. 

DO read up on whether or not you need special insurance to ride without a helmet. Again, here in Michigan, wearing a helmet is the rider's choice, as long as the motorcyclist is over 21 years old, has had a motorcycle (CY) endorsement for at least two years (or got the endorsement by passing a certified rider training course), and have a minimum of $20,000 in first-party medical benefits coverage. The same rules apply to passengers: they must be 21 or older, and have at least $20,000 in first-party medical benefits. 

DO NOT assume that the answer to a question about liability, insurance, the law, or a motorcycle crash will be clear-cut; most often, "it depends" is the best answer available. Every case is different; the circumstances of the crash, what type of vehicles were involved, who owns the involved vehicles, where the crash happened, the address on the insurance policy, and so many other factors can influence how the law will apply to a crash and what the motorcyclist is entitled to in terms of insurance coverage and benefits. If you have been in a motorcycle crash, contact an experienced attorney as soon as possible to discuss your situation. 

Obviously, one article can't cover all aspects of motorcycle insurance, or answer every question about coverage in the event of a crash. If you have questions or want more information about the information in this article, contact your insurance agent or call my team at 1-877-BIKER-LAW. 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.com/TheMotorcycleLawyer. 

 

Attorney Jason A. Waechter is a national attorney specializing in the areas of motorcycle and motor vehicle injury litigation. Mr. Waechter has collected millions of dollars in settlements, awards and verdicts for his motorcycle clients over the past 20 years.  Jason feels a duty to give back to his community. A portion of each case settled goes to educational resources for bikers, funds to help bikers while their cases are being litigated and our motorcycle accident prevention campaign.  Call Attorney Jason Waechter toll free at 1-877-BIKER LAW. Or visit www.TheMotorcycleLawyer.com