Motorcycle Insurance Minimums – Forget State Requirements!

Insights from a leading biker organization that sees the cost of motorcycle accidents every day

Nobody loves insurance. Most people try to get by with the very minimum required, whether your vehicle of choice is a car, truck, or motorcycle.

Perhaps it’s more true for motorcycle owners. Maybe it’s just a hobby, and you don’t want to pay the premiums. Or maybe it’s your only mode of transportation and you just can’t afford to spend on insurance.

Insurance is pretty darn important. You don’t know just how important until you need it.

In Colorado alone, 65 have DIED on their bikes so far this year. Think about what it would be like for your family if you died in a motorcycle accident. Think what it could look like for you and your family if you were injured. You know what a motorcycle accident can look like. (In case you’re still in denial about that, see my sister’s motorcycle accident.)

No one likes to think about that part. We all think it can’t happen to us.

I had the chance recently to speak to Laurie Easton-Montoya, founder of BikerDown.org, a Colorado-based non-profit organization that helps the biker community across America. They currently get 2 to 3 help requests every day from injured bikers or their families.

Her message for the biker community centers around the importance of insurance. And I believe it’s a message that should be passed along to the Enjuris community.

So, after some digging around and talking to people in the know, here’s the boil down.

What insurance do you need for your motorbike?

Liability insurance

Bodily injury and property damage liability insurance covers you in case you cause an accident. This is almost always required by your state at a specific minimum amount.

This type of insurance pays the expenses of the other driver (or a pedestrian, even) if they are injured.

Esurance recommends carrying more if you’re a newer rider or in an urban area. You could get by with less if you live in the sticks and have a lot of experience riding under your belt. Insurance.com recommends specifying guest passenger liability too.

If your liability insurance is low – just meeting your state’s requirement, for example – that earns you the label of “underinsured”.

This is important when you cause an accident but your insurance is too low to cover the resulting costs for the other party.

Underinsured/uninsured motorist coverage

On the flip side, you should also carry insurance that helps you when the other guy’s insurance is too low or nonexistent.

Underinsured/uninsured (UM/UIM) motorist coverage is the most important insurance coverage you can have for your motorcycle.

In Colorado, the minimum required insurance is $25,000. This barely begins to cover the cost of a serious motorcycle accident.

According to Scott O’Sullivan, board member and sponsor of BikerDown.org, at any given time at least 30% of drivers out there are driving uninsured or underinsured.

He says, “The reason you need underinsured motorist coverage is because if one of those people hits you, you’re not going to have enough to cover all your medical bills or lost wages or any other damages you may have. So my advice is get as much as you can afford. I recommend, generally, $100,000 as a minimum and that would mean that you have $100,000 liability, $100,000 underinsured motorist coverage. This way you’re protected in the event that somebody hits you or your family, you have enough coverage to get you back to where you need to be.”

Laurie also recommends as much as riders can afford when it comes to uninsured and underinsured coverage, pushing for up to $500,000. She says, “I cringe when I hear bikers talking about getting cheaper insurance,” also noting that uninsured motorist insurance covers hit and runs.

Says the NAIC, “Despite laws that compel the purchase of auto insurance, many people choose to drive without it. According to the Insurance Research Council nearly 13% of motorists, or about one in eight drivers, were uninsured in 2014.”

Surprise! Your umbrella policy probably won’t help with UM/UIM coverage limits

You may benefit from personal umbrella insurance coverage that could apply over and above your motorcycle insurance liability limits.

However, know that an umbrella policy is normally there to protect you from large claims against you, not to pay you more when you’ve been the victim of an accident yourself.

Says Laurie Infantino, president of Insurance Community Center, “One of the biggest E&O [errors & omissions] threats to agents when they write excess or umbrellas for both personal and commercial customers is failing to tell the insureds that neither their umbrella nor excess will go over UM or UIM. The perception that the umbrella/excess policies provide excess limits is wrong with very rare exceptions.”

If you’re counting on umbrella coverage to help cover costs that go above and beyond your UM/UIM coverage, make sure to confirm this with your insurance provider.

Comprehensive and collision motorcycle insurance

These types of insurance help cover gear and bike repairs and theft. Those who have never been in or witnessed the aftermath of a motorcycle accident may be preoccupied with the disturbing thought of something happening to the equipment.

I get it. It’s your joy. But repairing your bike should probably be your last priority when it comes to insurance.

Yes, it will be good to have your bike repaired. But think about the state your body will be in if your bike has been totaled – and what it’s going to take to fix that!

Short-term disability insurance can help keep you afloat

One unique way Biker Down is helping people take charge, stay afloat and be proactive is by including a form of medical insurance with its membership.

Biker Down offers membership for $35/month, which includes AFLAC short-term disability insurance.  “It’s just like the duck on TV,” says Laurie. “If you get t-boned by someone and you go to the ER, and then you end up in the ICU, you could be looking at $6-700,000. You won’t be working for a while.”

AFLAC’s short-term disability insurance can help cover costs in the meantime.

This form of insurance also includes roadside assistance, services related to the accident, medical equipment, and financial advice to help victims keep creditors at bay while you focus on your recovery and getting your life back. The Aflac insurance policies even cover services to provide emotional support to family members of injured or killed riders.

Who needs disability insurance? You do if you engage in “high-risk” activities. Considering the severe consequences of a motorcycle accident, I’d say that’s high risk.

What about your health insurance?

Yes, health insurance can help pay towards medical bills. But most people have deductibles to be met before help kicks in, and this alone can be tough to bear financially.

Consider also that health insurance does NOT cover:

• Lost wages
• Future medical expenses if you can’t work and as a result lose your health insurance coverage
• Injuries to your passenger or others hurt in the accident
• Co-pays
• Deductibles
• Out-of-pocket expenses
• Treatment outside your health insurance network
• Noneconomic loss, such as pain and suffering if you are left with scars, etc.

Medical payments insurance is optional for motorcycles, but if you have it, it can help cover the deductible on your health insurance. This type of coverage helps to fill the gaps, especially since motorcycle insurance can be much more limited in coverage than what you might get for your car.

Why your insurance provider doesn’t press you to pay for higher limits

Think about that phone call where you set up your insurance. You had to make some decisions on the spot. The rep probably told you what was required by law. I’m sure they also recommended higher amounts.

How likely were you to listen to them? Hey, they’re selling you insurance, so of course they’re going to tell you to buy more, right?!

If you’re like many, you sign up for the minimum insurance required to drive your motorbike legally in your state. You probably feel good about turning down those optional higher amounts, too, because it saves you on your monthly premium.

Insurance agents don’t press the matter enough. If you think about it, you’re just speaking to the salesperson. They themselves don’t see the financial mess that comes out of a motorcycle accident when it actually happens. That’s a different department at the insurance company.

“It’s there for the cost of 3 t-shirts a month, to do the responsible thing. What if your maximum is $25,000 and the hospital bill is $60,000? Or, more likely, $600,000?” Laurie points out.

Indeed.

What about bringing a legal case against the other driver?

Sure, if there’s someone else to blame, you can do that. But if you sue the driver, it’s a bare minimum of 3 to 4 months before you see any money (and much, much longer in many cases.) What are you going to do in the meantime?

Biker Down helps families but also looks to educate the community

“We pay it forward every single day,” says Laurie. With Christmas around the corner, Biker Down is looking to help families of bikers who’ve been killed in accidents via its Adopt a Family for the Holidays program. Every year since the program started 5 years ago, the number of families they help has increased. They are hoping to help 100 families this year.

Though Laurie and Biker Down are working hard to help those who reach out to them, the desired result is to inform bikers about the importance of having proper insurance and help avoid the devastating consequences of motorcycle accidents in the first place.

“With the proper insurance coverage, we could eliminate 1/3 of the fundraisers out there,” she says.

If you’re a motorcycle owner, this holiday season why not examine your insurance amounts and imagine what it would look like if you or your family needed to make a claim. Consider joining an organization like Biker Down to help protect those you love, get the word out, and take responsibility before an accident happens.

Take a moment to share with our readers: What sort of motorcycle insurance do you have?

For more information

• Visit the official Biker Down blog and their active Facebook page
• View our Guide to Motorcycle Accidents and Your Claim
• View one survivor’s story facing scars and debt after a motorcycle accident
• How insurance is structured can vary by state. See insurance.com for a discussion of split limit plans, combined single limit plans, stacking, and other concepts. Their guide to motorcycle insurance is also pretty good.