No Car? You Still Need Insurance.

Biking is awesome. You know that. One reason is that it’s way cheaper than driving but don’t cheap out by not buying auto insurance. Yes, auto insurance. I know, I know. Insurance is confusing. But when it comes to specialized bike insurance, there just isn’t a great “bike product” on the market. There is insurance geared to people who race bikes. There is insurance specifically for your bicycle. But when it comes to the kind of insurance you need, auto is where it is.

Here is how insurance works after a crash:

• Let’s say you’re driving to the bike shop, and you get distracted and accidentally crash into a pedestrian and break their arm. They sue you. Your auto insurance pays for their injuries. (Of course. This is straightforward.) Your insurance also hires you a lawyer to defend the lawsuit. (This is very, very important.)
• A variation: you’re riding your own bike, and someone runs a stop sign and breaks your arm. Their auto insurance will pay for that. (How much? They’ll pay YOU a little for your trouble since they figure you have health insurance and your out-of-pocket costs are small.  They will pay you through your LAWYER a lot more to compensate you for your lost time, your inconvenience, and your pain. Medical bills also get calculated differently when you have a lawyer.)
• A twist: a jerk blows the stop sign and takes off. Who pays now? Well, because you are on the ball, your AUTO insurance company pays for it. Same as above. You will hire a car accident lawyer who will go after your own insurance company and make them pay you. (This is the kind of insurance you really, really need. Do note - your insurance company isn’t a good neighbor, and it won’t pay you unless it thinks it has to.)

But what if you aren’t on the ball and don’t have AUTO insurance? Now, maybe you aren’t that worried. You may not have a car or auto insurance, but you do have a decent job with sick leave and health insurance. So what if you have co-pays and lose some leave…you might consider it a small risk under the circumstances.

Or is it? How about this – same facts, but instead of a broken arm, you have a concussion, some internal injuries, and a broken hip. You need three surgeries, two weeks in a hospital, and a month in a rehab facility to recover. You still have your health insurance, but your paid leave runs out. How are you paying your bills? Walking your dog? Caring for kids?

Even worse. What if you have a brain injury? Or become quadriplegic? What if you can’t do your job anymore? How are you going to support yourself? Your family? Where will you live?

This probably won’t happen to you. Probably. But there is a reason personal injury law is a profession – people do get badly hurt and have their lives upended. Every. Single. Day. (It’s happened to my family. More than once.) So protect yourself. Pick up the phone, call an AUTO insurance company, and get a quote. You’ll be surprised how inexpensive it is. Confused? Call me. I’ll talk you through it.

What is it exactly that I need to buy?

Insurance requirements vary by state, but here is the skinny in DC. When you buy auto insurance, it covers, at a minimum:

• Damage you cause to others' property: $10,000
• Liability to others for injury to them, bodily injury: $25,000
• Uninsured motorist bodily injury: $25,000
• Uninsured motorist property damage: $25,000

Part of this is pretty clear – if you injure someone, the insurance you bought is required to cover you for $25,000 in liability to them. (Bonus: your insurance company will also hire you a lawyer if you get sued.) So if you break their arm, there is plenty of coverage to compensate them. But what if you cause someone traumatic injury and they can no longer work? If you don’t have money in the bank, they can’t really get blood from a turnip and will take your $25,000 and walk away. But do you have money in the bank? Own a house? Have a salary? Their lawyer can and will go after your personal assets.  My suggestion? Protect your assets. I’d suggest a minimum of $100,000 in coverage – the majority of injury claims are under that threshold. (Besides taking care of yourself, imagine how horrible you would feel if you hurt someone. You’d want your insurance company to pay them enough to help them get back on their feet.)

The uninsured motorist part is more confusing.  Called “UM” for short, this covers you if the person who injures you has no insurance or not enough insurance. So, if you are the victim of a hit and run and have minimum UM coverage ($25,000), your insurance company will cover your injuries up to $25,000. While $25,000 is the legal minimum, you can and should pay for more coverage. If you have $100,000 in UM coverage, that coverage will compensate you for your injuries up to $100,000.

And if all of these numbers sound insanely high, I assure you, they are not. Lost wages are included in your expenses. Medical bills are insanely expensive. And even if you have medical insurance, who should that insurance benefit? You? Or should it let a reckless driver’s insurance company off the hook? Besides that, your health insurance company may be entitled to reimbursement.  Think about your monthly expenses and what it would take to keep you financially afloat if you could not work for six months – housing, utilities, daycare for your kids (who, TRUST ME, you want to go to daycare if you are hurt). Do you have short- or long-term disability through work? That helps. But if you are REALLY hurt, you can easily be looking at a lifetime of medical expenses and reduced earning capacity.