Need To Know: Motor Vehicle Insurance For Motorcyclists MATT DANIELSON
We all hope we’ll never be involved in an accident, but the reality is that many of us will be. Don’t get me wrong, I don’t think riding is dangerous. But, when you get out on the road, you’re sharing it with other riders and drivers and can be at the mercy of poor road and weather conditions. While insurance can’t prevent an accident, it is the best means to protect yourself after the fact. So whether you’re looking to insure a new bike or review your current policy, it’s important to know how much you – and your bike – are protected. What type of policy is best? How much coverage should I have? If another driver is at fault, won’t their insurance cover the costs? These are some of the most common questions clients ask me, and are a good place to start. Full coverage: Is that enough? Not necessarily. The term ‘full coverage’ can be misleading because it doesn’t necessarily mean the policy will cover everything in full in the event of an accident. Full coverage typically includes all the major types of coverages your insurance provider offers. But, some insurance companies define ‘full coverage’ differently. What’s more important is how much coverage you bought. If you also bought the minimum amount of coverage (read: coverage limit, $25,000 for example), you will most likely receive only the minimum limits for your injury, regardless of how serious it is or the verdict you receive in court. If someone injures me, won’t their insurance pay the expenses? Yes, but only to the limits of their policy. If you’re in an accident and the other motorist is at fault, their insurance will pay out, but that doesn’t mean it’ll cover all the costs. The other motorist’s insurance coverage will only pay up to their policy limit, and if they’re like most, they bought the minimum amount their state requires. For example, the minimum amount of insurance a person must have in North Carolina is $30,000. In Georgia, South Carolina and Virginia, the minimum is $25,000. Regardless of how serious the injuries or damages are (read: expensive), the other motorists’ insurance will not have to pay you any more than their policy limits. If the person that hit you has only minimum limits, that probably won’t be enough to cover your medical bills, lost wages, pain, suffering and inconvenience, which you’re entitled to if you’re in a serious accident due to the negligence of another motorist. Can’t I sue the other person if it was their fault? Yes, you can, but that won’t change the amount of money their insurance will pay you. Let’s say you sue and get a verdict of $500,000. The defendant’s insurance company still won’t have to pay you any more than the defendant’s policy limits. So, if the defendant’s policy limits are $25,000, that’s the maximum amount their insurance is required to pay toward the costs of the accident. Then I can recover from the defendant’s personal assets, right? More often than not, no. Most people don’t have enough personal assets to cover the costs of serious injuries. And, assets jointly owned with a spouse – like a bank account, house or land – typically cannot be used to satisfy a judgement. - continued next page 42
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