Motorcyclists Beware: Owned Vehicle Exclusion Defeats Underinsured Motorist Claim
Know the Answer: Do you have adequate uninsured/underinsured motorist (UM/UIM) coverage for your motorcycle?
If your motorcycle is uninsured or insured under a separate policy from your automobile policy, you may be at risk of incurring significant costs for an accident you did not cause:
- If your motorcycle is uninsured, you may be unable to rely on your automobile’s UM/UIM policies. Check your automobile’s UM/UIM policy for an “owned vehicle exclusion.”
- If your motorcycle is insured under a separate policy than your automobile, you may be unable to rely on your automobile’s UM/UIM policies. Check your automobile’s UM/UIM policy for an “owned vehicle exclusion.”
The “owned vehicle exclusion” prevents an insurer from having to pay UIM benefits on vehicles that policyholders own or habitually use, but for which they have not paid a UIM coverage premium.
What is Uninsured/Underinsured Motorist Coverage (UM/UIM)?
For motorcycle riders, UM/UIM coverage helps pay for your losses when:
- You are involved in a motorcycle accident with another vehicle and the other driver is at fault, and
- The other driver either doesn’t have insurance or has inadequate coverage.
Specifically, uninsured motorist coverage kicks in to pay for the costs associated with your injuries when the at-fault driver has no insurance at all. Underinsured motorist coverage covers the gap between what the at-fault driver’s policy pays and your remaining medical expenses when that driver has insufficient insurance.
Health Insurance vs. UM/UIM Coverage
Consider the following when determining whether to rely on your health insurance to pay medical expenses arising from a motorcycle accident:
- Your deductibles will likely be higher than those for UM/UIM coverage.
- Healthcare insurance won’t compensate you for lost wages, pain, and suffering, or punitive damages, which are typically covered by uninsured/underinsured motorist coverage.
In light of these realities, it is crucial that motorcyclists carry adequate UM/UIM coverage. If you are in a motorcycle accident and the other party has no or insufficient liability insurance, you can face significant costs for an accident you did not cause.