Excess limits of liability and how they work

1647 Willow Pass Rd, Suite 347, Concord, CA 94520
Phone Toll free in California 800-7-CYCLES
California's Largest Motorcycle Insurance Agency

THUNDER PRESS
MIKE FELDER'S INSURANCE COLUMN
BUELLS

MIKE FELDER'S INSURANCE COLUMN THUNDER PRESS LIMITS OF LIABILITY -------------------------------------------------------------------------------- I strongly believe that each of us are very, very confident in our riding skills. With this confidence comes a certain idea or belief of what we need to insure against. This belief usually takes the form of the "Basic Three", as I call it: Theft coverage--this one is obvious to many of us. Collision coverage--just in case we go down. Liability--the law says we have to. The law in most states require the third. In a nutshell, the law couldn't care less about you or your cycle. But, they definitely want to make sure you have coverage if you do damage to anybody in the course of operating your cycle. That is what liability coverage does. It pays outward. If you hurt someone while operating your cycle....it pays (usually up to $15.000, the basic amount). Some people have opted to raise that limit as high as $100,000 per person. The latter is a good move if you own property, have a sizeable IRA, money in the bank, assets, or anything else that makes you suable. And, believe me when I say, it does not take much to create a situation where $15,000 or even $100,000 might not cover the damage. That is the point of this article. A fellow rider was enjoying the festivities at Bridgeport recently. On Saturday, he decided to get away for awhile and enjoy the scenery along the Sonora Pass. It must be noted that the rider has decades of riding experience that translates into tens, if not hundreds, of thousands of miles experience. The Harley he was on was not his first. In short, he is a very capable and experienced rider. Deciding it was time to get back, he starting to look for a place to turn around. He spotted a cycle coming, so he waited. The cycle passed. He saw no other cycle, so he started his turn. Almost immediately, he was struck by a younger, less experienced rider who was traveling at a speed that was definitely in excess of the posted limit. The rider was near half his age, having a fraction of the experience, and piloting a cycle that was designed for low speed air maneuvers. The sportbike collided with our rider and everyone was thrown a considerable distance. The sportbike rider was transported by helicopter to a medical facility. Operations (plural) were performed and later transported by air (again) to a local facility. The years of experience translated into little by the time the police report was made. It seems that the law did not like the idea he was in the other rider's lane during this attempt of reaching mach one in the Sonora Pass. Our friend was cited to be in the wrong. His insurance policy is to pay for the damages. One hundred thousand dollars sounds like a lot of money, until you play the medical game. Seven years ago, a friend of the family used a helicopter to get out of a mountainous area for health reasons. It was $5000 then. I have a drawer filled with xeroxed hospital bills listing pharmacy charges alone that exceed $15,000 for a three day stay. Surgery can easily cost $35,000 to $50,000. Loss of wage and pain and suffering can place another burden on all this. In short, the $100,000 runs the chance of not being enough! Scary, isn't it?? And, if that amount doesn't cover it, the sportbike rider, with the help of an attorney, will do an "asset search" on our fellow rider and find out he owns a couple of HD's, a house, maybe a pension plan, or business. Those items could also be at risk. There are policies that can be added to a liability policy that will "kick in" after the basic policy is exhausted (used up). They are referred to as excess policies. They are additional policies that start at the end of your first policy and go up to $250K, or $500K, or even one million dollars. In a situation like the one mentioned, they are lifesavers. And while none of expect an accident like this to happen, fact is, they do. And when they do, it can turn your little empire upside down. Ask your agent about one. As a final note, thanks to all of the readers who stopped by at the booth at Ground Level Thunder. It was great meeting so many of you. And as usual.......the smart shopper is the educated shopper!!

Information in this article is probably correct as of the date it was written. Please check with your insurance agent or call Mike at 800-729-2537 before you make any life changing decisions based on what you read here. Comments are always welcome.