There is too much focus in the auto insurance marketplace on price. Most consumers don’t fully understand the terms of their auto insurance policies, so price often becomes the primary measure of a “good” policy, neglecting proper coverage for the risks one faces as a driver, pedestrian, cyclist, or passenger in someone else’s car.
Among the most misunderstood parts of a standard auto insurance policy are:
- Uninsured Motorist Coverage (UM) and
- Under-Insured Motorist Coverage (UI).
UM and UI insurance, along with excess or umbrella UM/UI coverage, provide essential financial protection in situations where the at-fault driver has no insurance or insufficient coverage limits. Many people erroneously assume that their health and disability insurance are adequate protection. Purchasing high UM/UI limits is critically important for motorists, cyclists, and pedestrians:
- High-Risk Vulnerability: Cyclists/pedestrians are highly vulnerable, and even minor accidents can lead to severe injuries. Cyclists/pedestrians face distracted, speeding, and reckless drivers, and accidents often result in high medical costs, disabilities, and loss of income. In these cases, the cyclists/pedestrian’s auto policy should cover damages if the at-fault driver lacks adequate insurance.
- Protection Against Uninsured Drivers: UM coverage provides a safety net if the at-fault driver has no insurance, which is more common than expected in some areas. Without UM coverage, cyclists may face out-of-pocket expenses.
- Coverage Beyond the Primary Policy with Excess or Umbrella UM/UI Coverage: Excess or umbrella UM/UI coverage extends protection beyond standard limits, adding an extra layer of security. Many cyclists/pedestrians don’t have an umbrella policy or have one that excludes UM/UI coverage.
Over the past decade, UM/UI have been among the largest claims at the Howes Insurance Group in Concord, MA. CEO, Greg Howes, and his team stress the importance of this often misunderstood coverage and try to educate their clients on its importance. Umbrella policies offering $1 million of excess UM/UI coverage cost around $100–$150 per car. For example, Howes Insurance recently placed a $1 million umbrella for a family with one home, three cars, and two teen drivers. The annual cost for the umbrella was $580, and adding excess UM/UI coverage raised the premium to $890, less than many cyclists spend on bike accessories.
To understand the benefits of purchasing higher UM/UI limits, consider these three real-world cases handled by attorney Ron Gluck of Breakstone, White & Gluck, a personal injury lawyer with over 30 years of experience representing injured cyclists:
- Case 1: A cyclist suffered a severe concussion when hit by a car. The at-fault driver had only $250,000 in liability coverage. Fortunately, the cyclist’s parents had purchased $2 million in UM/UI coverage, allowing the cyclist to recover $1.75 million after settlement.
- Case 2: Ron’s pedestrian client was hit by a driver with only $100,000 in liability coverage, though the injuries warranted $2–3 million in compensation. The client had only $100,000 of UM/UI coverage, despite purchasing $5 million of liability coverage. The client regretted not opting for higher UM/UI limits, which would have cost a few hundred dollars more.
- Case 3: A cyclist was injured by a driver with the minimum $20,000 liability coverage. Fortunately, the cyclist had $250,000 in UM/UI coverage, which provided financial support during recovery.
These cases highlight the importance of speaking with a knowledgeable insurance agent, like Greg Howes, to learn more about this critical, affordable coverage.
This summary is provided by Howes Insurance Group, attorney Ron Gluck of Breakstone, White & Gluck, and Michael Chinitz of Chinitz Law LLC, an avid cyclist and 20-year PMC rider who was severely injured by an underinsured driver in 2019. He was fortunate to have UM/UI limits that helped compensate him for the damages caused by a driver criminally charged and convicted for reckless operation of a motor vehicle
This information is a general description of the law and is intended for general information purposes only. It is not intended to provide specific legal advice nor is it intended to create an attorney-client relationship with Chinitz Law LLC. Before taking any action on this information you should seek professional counsel. Attorney advertising. Prior results do not guarantee a similar outcome.
