A QUICK GUIDE TO MOTORCYCLE INSURANCE,
OR HOW TO COVER YOURSELF
WHILE COVERING YOUR BIKE

by
Thomas L. Phillips, Jr.

First, I am not an insurance agent. I am not trying to sell you anything, and do not stand to make money if you follow the suggestions I am going to make. I am a lawyer who deals with insurance coverage in the context of representing people who have been injured in accidents. Because of this, I see on a much too frequent basis the tremendous problems people create for themselves by having the wrong coverage. That makes me care about insurance coverage the way that emergency room doctors care about seatbelts. We both see the tragic consequences resulting from failure to take a few simple steps to protect yourself.

With that out of the way, I want to talk about liability insurance coverage. The first thing you need to know is that a modern liability insurance policy provides a number of different protections. The first protection, “liability coverage,” protects you in the event that your negligence injures another person or another person’s property. Truthfully, when you are riding a motorcycle, that is probably the least of your worries. Anyone riding a motorcycle has got to be aware that they are likely to come out on the short end of any collision and, therefore, be more careful to avoid accidents than any other driver on the road.

The second type coverage offered in a standard liability policy is collision/comprehensive coverage. This is no-fault insurance coverage that obligates your company to pay to repair damage to your vehicle. This is nice coverage to have, and coverage that your lender will insist on, but failure to have it is not going ruin anyone’s life.

The same can be said about medical payments coverage (“med-pay”), which is a kind of no-fault health insurance that obligates the insurer to pay an amount up to its med-pay limits for medical expenses incurred by reason of an insured being involved in a motor vehicle accident. “Med-pay” pays (up to its limits) for expenses incurred within three years of the date of the accident. Because riders on motorcycles are more vulnerable to injury than people in other vehicles, med pay coverage is usually very expensive on policies covering motorcycles. It is nice to have, but as long as you have got health insurance the lack of a lot of med-pay coverage on your bike is not likely to put you into bankruptcy.

The type of coverage provided by your policy that I want to emphasize to you here is uninsured motorist/underinsured (UN/UIM) motorist coverage. What this does is create a fund of insurance that is available to you if you are injured by another motorist who has lower coverage limits than you do. Under Virginia law you can buy UM/UIM coverage equal to, but not greater than, the liability coverage you buy.

The advantage of having high UM/UIM limits is not always emphasized by insurance agents who, after all, work for companies that want to avoid having to pay large claims. I believe this is the most important coverage a motorcyclist can buy.

When I briefly touched on liability coverage, I acknowledged that motorcyclists are extremely safety conscious, and, therefore, are probably less likely to cause accidents than anyone else on the road. Unfortunately, motorcyclists are also subject to being injured in accidents caused by the inattention, stupidity or criminal acts of other people on the highway. As we all know, when a motorcyclist is involved in a significant accident, the chance of very serious injury or death is extremely high. The beauty of UM/UIM insurance coverage is that it allows you to be sure that when you are hurt through the inattention or stupidity of someone else there is enough insurance coverage to take care of your damages, which include medical expenses, loss of wages, loss of earning capacity, and pain and suffering. The way to do this (and the only way to do this under Virginia law) is to buy higher limits of uninsured/underinsured motorist coverage. This coverage also applies to protect your family in the event you are killed in an automobile accident caused by someone else’s negligence.

The State of Virginia does not even require liability insurance on many vehicles. It does require every insurance policy written on a motor vehicle principally garaged in Virginia to provide a minimum of $25,000 per person/$50,000 per occurrence worth of liability insurance coverage. This means that no matter how badly a driver having minimum limits of coverage injures another person, the most his insurance company will ever pay to compensate the victim is $25,000.

Unfortunately, the people most likely to have minimum limits – or no insurance at all – are the very people most likely to have accidents. Because insurance rates are based on statistics, the very highest risk drivers pay the highest premiums for the lowest coverage. If you, as victim of an accident, have higher underinsured motorist coverage limits, then your own company will pick up the difference between the limits available to you from the policy insuring the person causing the injuries and your UM/UIM limits. As an example, if you raise your UM/UIM coverage to $500,000 per person, and are injured by a person having minimum limits of coverage ($25,000/$50,000) then you will have $500,000 worth of total insurance coverage applicable to your injury -- $25,000 from the wrongdoers’ company, and $475,000 from your own company.

The two most common questions people ask are “Why do I need that much coverage?” and “How much does it cost?” If you talk to people who have been involved in a serious accident, as I do on a regular basis because of my job, you will quickly learn that with a serious injury, medical expenses can easily top $100,000, and sometimes are many times that. If the injured person is unable to work for a substantial period of time after the accident, their economic damage can easily amount to hundreds of thousands of dollars, without ever considering their pain and suffering. Given the special risk of a severe injury if you are involved in an accident while on your bike, I think the answer is that every motorcyclist needs higher limits of insurance coverage to protect themselves and their family.

The second question is best answered by your insurance agent. When I decided that I would write this I called my agent and asked him to run some numbers for me just for the sake of comparison. I am going to share those numbers with you not to encourage you to contact my agent, but to encourage you to contact your own agent to get them to run the same comparison. According to my agent, if I insured my bike at the statutorily required minimum level, that is, if I had $25,000 per person/$50,000 per occurrence worth of liability and matching UM/UIM coverage, my premium for twelve months would be $288.60. By increasing my liability and UM/UIM coverage to a single limit of $1,000,000 (that is a total of $1,000,000 per person and per occurrence) I increased my premium to $388.40. With this company, at least, I can provide forty times the coverage both to other persons who I might injure and to me if someone else injures me for an additional $100.00 per year. I suspect that most companies will give you comparable quotes, since the nature of insurance is that increasing coverage cost progressively less, because every person is much more likely to have a small claim than a catastrophic one.

I hope this information will cause each of you to take the time to look at your own insurance coverage. Like so many things, it is the kind of thing we never get around to doing until it is too late to make changes. If any of you have questions, please feel free to give me a call at 821-5022 or email me.

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