In the previous installment of this series, we delved into delivering a better understanding of the Bodily Injury coverage and what it does. More importantly, I want you to understand how your assets are exposed in the event itís your fault. Unless you are between the ages of 18 years old and 30 years old and your only asset is your bike, you are really taking your (and your familyís) chances by buying the minimum liability coverage. If you can afford higher limits, buy them.
What we didnít cover in the basic liability from the last installment is the Property or Physical Damage coverage. On a $25k/$50k/$25k, (GA min. limit- Check your local agent or broker for your min. limit), the last set of numbers are the Property Damage coverage.
Whatís that? In the most basic terms, Property Damage is anything that is not human but gets damaged or broken in an accident. So, when Joe Squid takes his R1 and launches it into a nice $74,000 S Class luxury German automobile, what are the odds that the $25,000 is fixing that Autobahn-loving sedan? You guessed it. Pretty slim. Starting to understand? This goes for telephone poles, road signs, guardrails and any other DOT, city or state owned fixed objects you may hit, as well as personal property like lawns, trees, garages and such. They will certainly charge you for replacement. Donít you love low limits now?
And donít think that a cheap bike is a reason to buy low liability limits. I live in a moderately priced house and drive a 26-year-old Swedish shoe box and ride a 10-year-old Kawi ZRX. I like cheap rides, but I donít buy cheap insurance for the sake of saving $30. I buy appropriate coverage based on my total assets. You need to do that, as well.
An equally important question is: What is Medical Payments coverage?
This is a line item that is optional on all types of vehicle policies. For motorcyclists, with the exception of a few insurers, the majority of Med Pay ends at $5000 or under in payment services. So once again, ask your local insurance agent or broker.
Letís say you purchased the max Med Pay of $5,000. You have a passenger and unfortunately so does the car you just hit. That $5,000 benefit will pay medical payments (emergency room is what you should be thinking) per every person involved. If three people are hurt, three people have access to the limit of $5,000 each. Got it? Is it necessary? Depends on how you look at it.
First, you are paying for passenger liability because we discussed how dumb it would be to exclude it in the last installment. Second, you are paying for the higher liability limits of $100k/$300k on your liability because you wanted to protect your assets. Those two things afford you certain amount of flexibility, but you have to remember that liability covers everyone but you.
So, thatís the hitch in the giddy up. That $5000 could assist you in paying for your medical bills. Will your own healthcare coverage do the same as medical payments coverage? Indirectly, yes. But hospital billing will always request payment from the vehicle insurance first. Is your HMO or PPO allowed to decline medical payments for your motorcycle injuries? They are not supposed to be able to do that, but it doesnít mean they wonít try. In most cases, the insured (you) will decline the coverage because the cost is pretty steep. Will it help to have it? If you are self-employed and do not have healthcare coverage at all, then itís certainly better than no coverage.
In some cases I have had customers buy it because they have high deductibles on their healthcare plans and use the Med Pay to cover that deductible. Itís clever, but Iíve never seen a claim where itís been utilized that way. So, Iím unsure if itís an effective method of securing payment for medical bills.
I originally planned to discuss un/under-insured motorist coverage as part of this installment, but itís so important that itís best to be an article unto itself.
In the meantime, I hope youíre learning and asking your insurance agent, insurance broker or online insurer questions. Donít go through life not understanding whatís at stake. People hate to deal with it. Until they need it. Then, I am suddenly the coolest person you know.
Kirk Harrington is a longtime rider and avid motorcycle enthusiast, and heís one of the nationís only specialized motorcycle insurance agents, operating from his location north of Atlanta, Georgia.
Motorcycle Insurance Buyerís Guide
Motorcycle Insurance: Casualty Liability
Motorcycle Insurance: Uninsured and Underinsured Motorist Coverage
Motorcycle Insurance: Comprehensive Collission Coverage