Making sense of the insurance coverage issues for cyclists
by Kris Thompson 11/03/2011
Thanks to Megan Hottman, "The Cyclist Lawyer" for providing this article! Hottman Law Office is a litigation and personal injury firm specializing in cyclists and athlete representation.
What cyclists need to know about homeowners, renters, auto and health insurance as it pertains to bicycles, cycling injuries, theft, and damage.
I had a "The Cyclist-Lawyer" booth set up at Veloswap last weekend, and the #1 topic people stopped by to discuss was insurance. Questions like “What happens if I don’t have auto or health insurance and I cause an accident or hit a pedestrian?” or “My bikes are really expensive, what’s the best way to insure them against theft or loss?” came up repeatedly. Two days after Veloswap, Kris at 303cycling sent me a link about “bicycle insurance,” asking my thoughts on it. So it seems, the topic is on your minds . . .
Below are some of the most common coverage issues we face as cyclists. Note: this discussion does not have anything to do with injuries or property damage resulting from a competitive event. This is a discussion about the cyclist out riding on public roads, for recreation or commuting purposes. I discussed these issues with my own insurance agent with regard to my own policies and you’ll see quotes from him below. Of course to be sure about your coverage, you’ll need to request a copy of your policy from your agent and read it carefully, as every insurance company is different in their claims-handling practices…
1. “What if I’m riding my bike and I hit a car, another cyclist, or a pedestrian. When I’m at fault, who covers their injuries and property damage, and who covers mine?”
If you are at fault in an accident involving another car, cyclist, or pedestrian, that person will seek recovery from you. Your auto insurance is not going to cover that person, because their injuries did not arise from your use of a motor vehicle. However your homeowners/renters insurance will cover their damages.
My agent says:
A homeowner or renters policy (review your liability section) will cover the compensatory damages for which any insured is legally liable because of bodily injury or property damage caused by an occurrence covered by the policy. Sporting activities such as riding a bike would be a covered occurrence, and therefore the policy would cover damage to the other party if you were liable.
As far as your own cycling equipment, there is not a covered peril listed on a homeowners policy that this would fall under, therefore your bike would not have coverage in this situation.
Your own personal injuries would not fall under a home or renters policy, but would be covered under your health insurance. A common rule with liability insurance is that you cannot be “liable to yourself.” Therefore, the medical coverage on a homeowner policy will not come into play for the insured –but it will cover the person you injured. So for your own bills, med pay (auto policy) or health insurance or potentially uninsured motorist coverage (auto policy) are the options.
[One other note, if you are riding professionally and getting paid at the time, that might be a sticking point - homeowners insurance would not cover the liability occurrence].
2. “What if my bike is stolen?” Does it matter where it is stolen from?
A homeowner or renters policy will cover it (after you pay your deductible). Note: high deductibles may result in you being better off just replacing the bike instead of filing an insurance claim. Review your deductibles relative to the value of your bikes. And some insurance companies will allow you to add a “rider” to your policy for specific items, like bikes (as you would for expensive jewelry or furs). Some will not.
My agent says:
Personal property coverage is not limited to the location of residents. If the bike is stolen at a different location it would be a covered loss.
3. “What if I drive my car under an awning (with bikes on top) or a deer runs out in front of my car –and my car and bikes are damaged?”
My agent says:
Homeowners or renters insurance will cover the driving under an awning while on top of the car. I also had a claim where the driver hit a deer, dented his car, and then the deer flew into the bikes on the back of the car doing damage to the bikes. The good news is that the damage was a covered peril on both the auto policy and homeowner’s policy; the bad news is the car’s comprehensive deductible was $1000, but the bikes that were damaged were covered under his homeowner’s policy which had a $2500 deductible. The deductible can be a tough pill to swallow in some cases. Generally renters have a smaller deductible than individuals with homeowner’s insurance- $500 instead of $1000 or more.
4. “What if someone hits me with their car while I’m riding my bicycle?” Who will cover my expenses?
Now – if you are hit or injured by someone else, their auto or homeowners/renters insurance will cover your medical expenses and property damage. If the person who hit you is un-insured, under-insured, or flees the scene, you may need to fall back on your own insurance, such as your auto policy’s UM/UIM coverage (stands for uninsured or underinsured coverage). UM/UIM coverage is frequently used when the car flees the scene (“hit and run”) because that ghost car is treated as an “un-insured motorist” by your insurance coverage.
My agent says:
Yes, a cyclist's auto UM/UIM coverage should cover them if they are struck by a car that flees (hit and run) even though the cyclist is on his bike, not in his car. If the cyclist has auto insurance, there is potential for the UM/UIM coverage to kick in. When I say potential, I mean it probably would cover the expenses, I just cannot think of a situation where it would not. I recently had an insured sitting on the porch of his apartment when a car lost control, and hit him on his porch. He is going to have coverage through his UM/UIM.
You can also turn to your auto policy “med pay” coverage for help with your medical expenses: Med pay coverage under your auto policy (assuming you did not waive it) covers a cyclist’s medical expenses if they are injured in an accident with another vehicle. But -if the cyclist was injured because of their carelessness or was involved in a “single bike accident”, it would not apply. And usually med pay is only $5000. Your homeowners/renters insurance will not cover your medical expenses, even if you were not at fault.
My agent says:
that is not the intent of the liability coverage. It is for instances where the insured is at fault for bodily injury or property damage to someone else.
A recent example of how the medical coverage on a homeowner’s policy is used was this. My insured had a graduation party with about 100 guests. One of the guests was a 13 year old boy who was horse playing in the front yard. While goofing off, he tripped and fell onto a sharp piece of landscape material that cut his knee deeply. He ended up with 25 stitches, and a $3000 emergency room bill. Since his family did not have medical insurance, they ask the homeowner throwing the party to help. So when they called me, we opened a claim on their homeowners insurance under the medical expense coverage. This coverage will be a quick payout for them up to $5000, for the insured does not have to be found liable for the injury before payment.
5. What if someone tries to hit me or run me off the road with their car, on purpose?
… This can be tricky because insurance does not cover “intentional bad acts.” Insurance covers “accidents.” In such cases, if the police are called, that driver is likely to be cited with criminal charges. Their insurance company will likely deny coverage if it was an intentional act and not an accident –so this is another scenario where your own auto UM/UIM coverage might kick in.
6. Let’s say you hit a cyclist or pedestrian with your car. Or someone gets hurt on your property. These injuries can come with huge medical bills, which may exceed your insurance policy limits. If someone’s damages are not covered by your insurance limits, they can come after you personally –your bank accounts and your assets could be at risk. “What is the best way to protect myself against someone who sues me because I caused them injury (cycling-related or otherwise)?”
Carry homeowners/renters insurance and auto insurance (assuming you own a car) AND consider adding an umbrella policy for additional coverage in the event you are seriously injured or worse, you seriously injure someone else. A $1 Million umbrella usually only costs $200-300/year when added to your policy. This gives you your policy limits on auto/home PLUS an additional $1Million in coverage. Most insurance companies require you have home and auto insurance (with the same company) before they will issue an umbrella.
My agent says:
The renters or homeowners insurance must be in force prior to the issuance of an umbrella. To be eligible you need: Fairly clean driving records, home and auto policies with liability limits of $300k on the home, and $250/$500k on the auto insurance, and generally the issuing company would like to see the underlying coverages with the same company.
*You can also add an Endorsement on the umbrella for UM/UIM – it does cost extra (my insurance adds $28/vehicle/year) which extends UM/UIM to policy limits plus $1Million –a very good thing to have as a cyclist for the reasons discussed above.
A final note: if you are sued by someone that you injured, and it is a case where your auto or homeowners/renter policy will be paying that injured party, your insurer will provide you an attorney and defend you. However if it is a case where your insurance company pays out the policy limits to the person you injured, and the injured party is still seeking more money above and beyond those limits, your insurance company’s attorney will likely withdraw once policy limits are paid, and you will be left defending yourself or hiring your own lawyer to defend your personal assets. This is another reason an umbrella policy can be helpful –it will extend the representation of your insurance company and their defense of you (because rest assured they will fight hard before they pay out a $1M umbrella!).
Kris asked: what’s the difference in renters vs homeowners coverage? Nothing as far as the cycling issues discussed above. The difference is that renters insurance covers the renter’s property inside the residence, but doesn’t insure the residence itself –whereas homeowners covers the property inside AND the structure itself (hence, the reason HO premiums are much higher than renters insurance).
One more thing to note: if your insurer issues a separate policy per vehicle in your household, you can STACK your coverage. So –say you are hit (while riding your bike) by a car and they flee. Say your UM/UIM per vehicle coverage is 100/300k. If you have 3 cars in the household, this will actually give you $300/900k in UM/UIM coverage.
Like I said at the beginning – every policy and insurance company is different, so these answers may not apply to your situation (this article is not legal advice). It is a good idea to review your policies or have a discussion with your agent about your cycling-related questions before something happens, rather than after.
(SA Wheelmen note: as mentioned above, please check with your own insurance company(s) to determine your level of coverage. Do not assume the information in this article will pertain to you.)