Insurance Issues
This article was written by John Duggan and originally appeared in Bicycle Paper in April 2010.
Unbeknownst to many cyclists, insurance to cover cycling-related damages is generally pieced together from a combination of auto insurance, health insurance and homeowner's/renter's insurance. Until recently, there was no specific “bike insurance” to cover situations where there was no available automobile, medical or homeowners/renters insurance. This article will briefly review coverage in common situations and discuss the new bike insurance that should be available in Washington and Oregon by the time you read this.
Bike v. Car (motorist at fault):
1) As a cyclist, if you are hit by a car and the crash is the driver’s fault, your medical bills may be covered by the motorist’s Personal Injury Protection (PIP) coverage, your own automobile PIP coverage and/or your health insurance. In some states PIP coverage is optional, and not all drivers carry it. In Washington, the driver’s PIP insurance is primary, regardless of who is at fault. The cyclist’s PIP coverage is secondary, and the cyclist’s health insurance is third in line. The latter will typically refuse to pay medical bills until all available PIP coverage has been exhausted. 2) If you are unable to work due to a car vs. bike incident, your lost wages may be covered by the motorist’s PIP policy, your PIP policy, the driver’s liability policy and/or your automobile Underinsured Motorist (UIM) coverage. Like PIP, UIM insurance is an optional coverage that most drivers carry as part of their automobile policy, and it covers a cyclist if the driver who caused the crash does not have adequate liability insurance. 3) Your bodily injury damages, including pain and suffering, disfigurement, loss of enjoyment of life, etc. may be covered by the motorist’s liability policy and/or your UIM coverage. 4) Your property damage is covered by the driver’s auto liability insurance.
Sections one through four above assume that the driver who you hit is insured. If the car was not insured, your automobile PIP and UIM coverage would step in to cover your damages, except for the property damages (i.e. your bike, accessories, etc.). In this case, you could make a claim with your homeowner's/renter's insurance, but such a claim may not be worthwhile to pursue because of the deductible and the impact on future premiums.
Bike v. Car (cyclist at fault):
If you cause the incident and damage the car or injure its occupants, your automobile policy will not cover such claims, but your homeowner's/renter's insurance may provide liability coverage. You will not be able to recover bodily injury damages such as those outlined in section 3 above, but because PIP is “no fault” coverage, your medical bills may still be covered by the driver’s PIP, your PIP and/or your health insurance. Likewise, your wage loss may be covered by either or both PIP policies. Your property damage may be covered by your homeowner's/renter's insurance, but as stated above, the claim may not be worthwhile because of the deductible and impact on future premiums.
What if you do not own a car or a home, or do not have health insurance or renter's insurance? If this is the case and someone who is not insured injures you, or you simply crash on your own, you could face a mountain of debt. While insurance companies in countries such as Canada and England have offered bike insurance to cyclists for some time now, there was no such coverage available in the United States until recently. A Texas-based company called Clipp, Inc. now offers basic bike insurance to cyclists, and sometime around March 1, 2010, Clipp will be extending its coverage to cyclists in Washington, Oregon, California, Virginia and Illinois.
The basic plan will cost $99 per year and provides $1,000 in property damage, $1,000 medical and $25,000 accidental death and theft coverages. Clipp’s bike insurance will not provide any sort of liability coverage should the cyclist injure someone else. Nor will it provide UIM coverage for damages such as pain and suffering, disfigurement or loss of enjoyment of life should the cyclist be injured by someone who does not have adequate insurance. The property, medical and theft benefits are on a “per occurrence” basis, which means it’s possible to file multiple claims per year if the need arises. Property damage is subject to a $500 deductible and is for a predetermined amount, established upon purchasing the policy and by paying an additional $15 for every $1,000 increase in coverage. For example, if you wanted to insure your bike for $5,000, you would pay a premium of $159 ($99 for the first $1,000 plus $60 for an additional $4,000).
The medical benefit is an “excess” policy, meaning it will only pay out after your other health coverage, if any, is exhausted. Theft coverage is subject to a deductible, which is the greater of either $250 or ten percent of the bike’s value, up to a maximum of $500. Additional benefits include a mandatory annual three-hour safety-training seminar through the League of American Bicyclists.
While this new bike insurance does not provide all the coverages available through automobile, homeowner's/renter's and health insurance, it does provide some basic coverage for the cyclist who does not own a car, have medical insurance or own a home. For more information, go to their website.
Locating the right coverage to satisfy your cycling claim can be a complicated puzzle. While the above scenarios are typical, remember that each situation is different and outcomes depend on the facts of each individual case, the wording of the applicable insurance policy and the laws of specific jurisdictions. If you are involved in a bike vs. car incident, please consult with both your insurance agent and a competent cycling attorney.
Ride safely!