Theft and crash damage are the two most common fears of every cyclist. While both of these concerns are valid, being sued for liability, getting hit by a car, or suffering an injury, are much more significant events due to severity of the consequences. While managing that risk through responsible behavior, proper safety precautions, and awareness of your surroundings goes a long way, accidents by definition are unexpected and sudden and nobody is immune. Luckily, there are insurance instruments that are created to manage the financial burden that may arise from such accidents, and they are discussed below.
Liability Coverage
A liability is when a person becomes legally responsible for his action, such as damaging property or injuring a person. One of life’s lessons is that you do not have to be wrong to get sued, and when you are sued you must defend yourself, or lose by default. Liability coverage will pay for an attorney to defend you and then pay the plaintiff, up to policy limits, if the case does not work out in your favor. Considering that a good defense attorney costs between $500 to $1,000 per hour and liability coverage costs a small fraction of that, having it can prove to be advantageous and shield you from serious financial responsibility.
If you have a home insurance policy, you may already have liability coverage, but don’t automatically assume that you do – review your policy to see if the liability section of your policy covers your “personal activity” away from the home. Since cycling is a “personal activity” and if it is covered by your home insurance, then you are already covered for liability when riding your bike. If your home policy is a “location only” policy, meaning the liability section of your policy only covers you for liabilities occuring at your home, then you should consider adding liability coverage to your bicycle insurance. If you ride an electric bike, there is no argument that you need cycling liability coverage: because an e-bike has a motor, most home insurance policies will exclude coverage and deny any claim relating to your use of the e-bike.
Scenario: While riding on a busy city street a distracted pedestrian staring into a cell phone steps out from between two parked cars directly into your path and is knocked to the ground. The pedestrian sustains an injury that requires EMS transportation to a hospital, the police attend and take statements from both parties involved. Soon thereafter you receive a demand letter from a law firm representing the pedestrian. Without a liability policy to protect and defend, you are faced with a $10,000 attorney retainer to mount a defense. If there is a liability policy in place, the insurance company will assign a law firm to defend you and if the outcome is not in your favor, the policy has a cash reserve to satisfy the plaintiff's demand. The case is settled without any financial ramifications to you.
Uninsured Motorist/Vehicle Contact Protection
Colliding with a car while riding a bike can have devastating outcomes, regardless of who is at fault. According to the Centers for Disease Control and Prevention, nearly 1,000 bicyclists die and over 130,000 are injured in crashes with cars every year. Due to the significant difference in size, weight, and safety features between a cyclist and a car, cyclists are significantly more vulnerable and generally do not fare well in a crash with a car. The outcome of such collisions vary based on the speed of the vehicle, the points of impact, and the overall circumstances of the incident.
If you train on the road, commute on your bike or share the road with cars, the risk of getting hit by a car should not be dismissed. While there’s no way to undo an accident, there’s a way to lessen the financial burden of the crash with the optional Vehicle Contact Protection coverage that can be added to any bicycle insurance policy from Velosurance, with limits from $10,000 to $25,000. This coverage works similarly to the uninsured/underinsured (UIM) motorist coverage on an auto insurance policy and covers medical expenses, physical therapy, mental health services, lost wages and other expenses arising from a bicycle-car accident. This coverage is a must if you share the road with cars.
Vehicle Contact Protection is a must if you are riding an electric bicycle simply because your car insurance Uninsured Motorist (UIM) coverage does not extend to e-bikes, as they are considered motorized vehicles in their own right; Uninsured Motorist coverage only extends to the vehicle described in the auto insurance policy. Scenarios below only apply to riders of conventional pedal-powered bicycles.
Scenario: You do not own a car so your bike is your only vehicle. On a commute to work, a car runs a red light and hits you. The at-fault driver stops, and you are taken to the emergency room. It is later discovered that the driver has a low liability limit on his insurance, which is not sufficient to cover your medical expenses. Vehicle Contact Protection covers the gap in coverage, up to the selected limit.
Scenario: While riding down a country road you are passed by a pickup truck towing a trailer, which sideswipes and knocks you to the ground, the truck drives on. While the truck driver may not have seen the accident, this would be termed a hit-and-run accident and you might be able to recover hospital and other medical costs for your injuries from your own car insurance PIP and/or UIM. For these coverages to apply there must be contact with the automobile (in this case the trailer) and you will need a police report. If you do not have UIM coverage under your auto insurance, Vehicle Contact Protection would provide this coverage instead.
Scenario: While riding on a city street you are hit by a motorist who turned in front of you, the motorist is cited by the police for causing an accident. You are injured and transported to the emergency room. Your injuries require you to be admitted to the hospital and when released, you are unable to return to work for a month. The accident and hospital medical bills along with loss of income has caused you financial difficulties. Despite driving a very expensive car, the motorist has no liability insurance. As a result, medical costs along with your personal compensation can most likely be recovered from your personal auto insurance’s Uninsured Motorist (UIM) coverage. Once your UIM limit is reached, the remainder is paid out by Vehicle Contact Protection on your bicycle insurance.
Medical Coverage
The cost of medical services continues to spiral out of control. In order to keep prices appear competitive, health insurance companies are offloading more costs onto their clients. As a consumer, you’re paying more for fewer services, and end up paying significantly more out of pocket: annual deductibles have gone up as high as $6,500 per person or $13,000 for a family, per year and they may be paired with other hidden costs, such as co-insurance, which ranges from 15% to 40% of the total bill. Specialty services such as EMS and emergency room might have deductibles and copays that are separate from your major medical coverage.
Considering that cycling is the highest risk activity most people undertake, it makes sense to shield yourself from financial burden in case of a bicycle accident injury. Speciality bicycle insurance from Velosurance offers optional medical payments coverage to add this specific need. This kind of coverage is also known as medical gap insurance and it is specifically designed to fill the “gap” between what you have to pay out of pocket before your primary medical insurance starts covering the rest of the costs. This coverage is particularly beneficial for those with high-deductible plans or those lacking medical coverage. If you do not have medical coverage, this will serve as your main health insurance, covering you up to the chosen limit. Because this coverage only applies to medical expenses related to bicycle accidents, it is relatively inexpensive, but provides the much-needed coverage in the highest-risk situation. When purchasing this coverage, consider your existing health insurance’s deductibles, and purchase the limit that matches that number. Velosurance offers medical payments limits from $1,000 to $10,000.
Scenario: While riding your bike you go over the bars and break your collarbone, the surgery costs $30,000 and it is recommended that you attend 10 physical therapy sessions, each requiring a $250 copay, for a grand total of $32,500. Your health insurance has a $6,500 deductible, but you also have a $10,000 medical payment coverage on your bicycle insurance policy. Approximately a month after the surgery the hospital will send you the bill for $6,500 and once you complete your physical therapy, your health insurance company will send you another bill for $2,500. You will open a claim with the bicycle insurance company and submit these bills, for a total of $9,000. Within two weeks you’ll receive a check for $9,000 that you can use to pay these medical expenses. Your total out-of-pocket expense is $0.
Conclusion
Insurance exists to limit financial exposure in unexpected situations. As an educated consumer you must have a clear picture about your financial standing and your personal risk tolerance, and select your insurance coverage accordingly. If cycling is a part of your lifestyle, it is prudent that you consider the risks associated with your sport. The bicycle insurance experts at Velosurance will work with you to tailor a policy to address your specific concerns so you can ride with the peace of mind knowing that if anything were to happen, you’d be financially protected.