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  #1  
Old 11-27-2012, 02:01 PM
Scott E. Bonds's Avatar
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Default Insurance question

I would like to pose a question to the older riders and especially any attorneys out there. In a recent article MCN magazine had an attorney that recommended I carry the same limits on uninsured/underinsured motorist coverage as liability on my bike. I have enough assets built up that I carry high liability on all my vehicles. I asked a friend who echoed the advice very strongly so I bit the bullet and raised my uninsured/underinsured to $500,000. It doubled my insurance to about $650 a year for the strom only.

Am I paranoid or does this make sense. I have good medical coverage at work and ride 15,000 miles a year. I am not worried about my medical bills as much as God forbid biting the big one and needing care the rest of my days.
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  #2  
Old 11-27-2012, 05:41 PM
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Interesting question. Your liability coverage protects you against the claims of others who claim you hurt them or damaged their property. Uninsured/underinsured motorist covers you when someone else is liable and their insurance isn't adequate to pay your claim against them. The standard recommendation seems to be to buy UM liability coverage equal to your liability coverage. I don't know why. If an uninsured driver hits you and your passenger, would your liability coverage pay the passengers claim, or your UM coverage???

There are four flavored of this insurance...uninsured, underinsured, liability, and property damage. You don't need the property damage part if you buy collision coverage. In some states the uninsured and underinsured coverages are separate.

Scott, do you have an umbrella liability policy? An umbrella policy is a personal liability policy over and above the liability coverage you buy on your homeowner and vehicle policies. It is reasonably priced, requires moderate limits on your other policies (maybe less than you have now), is sold in million dollar chunks. I've read that the amount of umbrella coverage rule of thumb is to buy coverage equal to twice your non-retirement assets...qualified retirement assets like an IRA are well protected by law in most states.

And, with any substantial thing like this, check with your agent and perhaps with a lawyer to get the best info, especially state-specific info.
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Old 11-28-2012, 08:53 AM
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Scott, after 40+ years of buying car and bike insurance, I have yet to find an agent who will coherently advise me on sensible coverage levels. It almost seems like they go out of their way to avoid it; as if they'd be liable if they recommended something and got it wrong.

Having recently had a bad accident that threatened my ability to work, I was thinking pretty hard about "the big one" myself. What I do is take short-term and long-term disability insurance at work, and of course, get the best medical coverage they offer. The short-term will cover 30 days at my full pay rate, the long-term will cover at 60% indefinitely. Assuming I was disabled and could collect Social Security, that would come close to providing enough to live on.

The greatly increased risk of becoming disabled is something all motorcyclists have to accept. No matter how much gear you wear, no matter how careful you are, no matter where you live and ride, you're a bag of meat and bones out there that's up against tons of steel hurtling along with the energy of an artillery shell and a distracted pinhead for a control system.

Hell, I think I just talked myself into selling my bike.
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Old 11-28-2012, 09:23 AM
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I'm a plus one on the umbrella policy. I have a substantial one since I have horses and here in Oregon if some idiot comes on my property even without my permission and get injured by one I am liable. Also for the last 22 years I have as part of my morning ritual always put a holster on my belt as I put the belt on my pants in the morning. Someday some idiot may attack me, that idiot may survive the encounter, if so he will likely get a shyster attorney that will attempt to rob me of what is mine for injuries the attacker sustained. I like knowing that if that happens the insurance companies lawyers are better than what I can afford and since the claim will be against the change in their pocket they will be diligent in my defense.

I have good health insurance. So I don't pay for personal injury on my mc insurance. After my crash in oct the guy who hit me's ins sad my bike insurance would have to pay my medical and they would reimburse. I told them I didn't elect for medical and they should pay my doctors direct. They still sent paperwork to my insurance requesting my records. Buerocrats.

500k of uninsured or underinsured sounds like a waste to me, I would spend the premiums on umbrella and life insurance coverage. If you die in a crash caused by underinsured or uninsured I doubt a mop will cost near that much but a life plan will help those you leave behind.




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Old 11-28-2012, 09:25 AM
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Also.

AFLAC

that's good stuff if your injured. I got payment after my crash sepetate from the pinhead who hit me.


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  #6  
Old 11-28-2012, 10:06 AM
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Scott, you might find something from the web site or a telephone call to your Kentucky Department of Insurance:
Department of Insurance

Other states use different names for the department, but all states have a state insurance regulator that offers some consumer info.
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Old 11-28-2012, 09:56 PM
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As a risk manager (healthcare), I am familiar with liability insurance issues. I have $ 500,000 liability and the same limits of un/underinsured motorist coverage. At this stage of my life, I have substantial assets. In terms of the policy limits, I figure that half a million of un/underinsured motorist coverage should cover a fair amount of the neuro rehab that I may require if some young kid driving a beater runs me over, in addition to my medical coverage at work.

I also endorse the concept of an umbrella policy, but be aware of two considerations: it likely does not provide additional layers of coverage for un/underinsured motorist coverage, and to provide umbrella coverage for motorcycles, it may require higher policy limits of the primary coverage underneath. As an example, my personal umbrella coverage requires $ 300,000 limits on my autos and homeowners liability coverage, but it requires $ 500,000 limits on my motorcycle liability coverage.

As to why agents don't recommend specific policy limits, it is so you cannot successfully sue them if you buy too little insurance at their recommendation and then suffer a loss greater than the amount of your insurance coverage.

In regards to what does a policy cover, we have a saying in the insurance industry: RTFP, which stands for read the fracking policy. The policy language tells you what is and is not covered.
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Old 11-28-2012, 10:06 PM
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My Safeco umbrella requires $500k liability coverage for cars, motorcycles, motorhomes, and large-ish boats. $300k is required for personal liability, home, other RV, smaller watercraft. Different companies and different states may have different requirements.

Understood that the umbrella liability policy does not cover others liability to you. The original poster stated that he had substantial assets and therefore had high liability coverages. In this case consideration of an umbrella policy is wise.

Good point about the agent not sticking their neck out with a coverage recommendation.
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Old 12-04-2012, 11:04 AM
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Thanks for the replies. I am in process of getting an umbrella, however, that is primarily protection on the liability side. I never carry passengers, no matter how nicely they ask...just not worth the risk (excluding wife).

Just to clarify for some who took the time to reply. My further and still incomplete research informs me that my long term disability and medical coverage is just that ...medical coverage. It kicks in after liability claims made on others policies. Un/under insured kicks in imeadiately and is much richer insurance. I am also getting close to retiring early (fingers crossed) and will loose the level of medical coverage I currently enjoy.

To those of you who carry state minimums or think insurance is for repairing your bike/car.....you probably should educate yourselves a little more. I could care less about the cost of fixing my bike.

P.S. -my second wife (before we were married) had state minimums on her liability for her car. She had a wreck and the other party made a lot of frivolous claims. Her carrier balked at settling and drug it out. In the end her liability far exceded her insurance and she almost lost her house in the process. I had a friend sue HER insurance for bad faith and get us indemnified from the case. I had to delay our wedding 4 years to keep my assests off the table. It was an eye opening experience for me about insurance and that my company could end up working against and not for me.
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2000 Red Honda XR 400r
2003 Green Honda Rincon 650 ATV

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Last edited by Scott E. Bonds; 12-04-2012 at 11:13 AM.
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  #10  
Old 12-28-2012, 10:58 PM
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Default Atty's Opinion

Scott & All: I am a per inj atty and rider of DL650k7. Liab ins pays what you owe someone or something you hurt or damaged because of your negligence. Usually a moto can't do much damage to a car. When you rear end a car on your bike, the cager isn't too likely to have whiplash but he might claim he did. You could broadside a Rolls and it might cost $5k to fix a dent. I'd not load up on liab ins. UIM is much different because it provides insurance for the other guy who negligent hurts you. So when the cager turns left in front of you and he has no ins (about 1/3 of drivers in Wash. don't have it), or he doesn't have enough to cover your million dollar claim, your UIM covers it. You are far more likely to need the other guy to have really high limits. But usually, you can't just carry $1m in UIM and 300K in liab, but you need to ask your agent what you can do. I have mixed feelings about the umbrella. If you only drove moto, you don't need it but if you also drive car, AND IF you have assets, you need the umbrella, which pays $ to the people who sue you because you hurt them negligently. Most PI cases are done on a contingent 1/3 atty fee. I don't take a case unless there is insurance on the other side. I don't take cases unless they are winners because I have to finance the whole process and wait for several years or more to get paid after I put in all the work. If a trespasser came to me because a horse kicked him, I'd never take the case because a land owner owes no duty care to a trespasser. That horse kickee would have represent himself. Finally, according to govt reports, about 98k are killed every year by medical errors in hospitals. About 2% become claims for damages. About 120 or so become lawsuits tried to a jury and over half are defense verdicts and the plaintiff's atty spent at least $100k of his own money to try the case. The fabled ambulance chasers may be out there but I've never met one, heard of one, or saw one. There have been well-known fraud operations in Calif. involving faked car accidents, chiropractors/medical doctors, and PI attorneys. I wouldn't call these gents ambulance chasers or hair trigger litigators. You should never have more liab ins than your insurable interests (the value of what you could lose + defense costs. Your single biggest problem is UIM. The value of your assets is NOT what you paid, NOT replacement costs, but is Fair Market Value. That is what the jury instruction says about the value of claims.
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