“Don’t worry. I’ve got full coverage on my bike.” If I had a dollar for every time a potential client started the intake call with this reassuring platitude, I’d have nearly as much as the insurance agent who sold the “full coverage” policy to the unsuspecting biker calling my law firm for help after a crash. The truth about motorcycle insurance is that “full coverage” is only a small portion of the value of the policy sold. “Full coverage” just means that if your bike is damaged, it will be repaired less the cost of the deductible.
While this is obviously a very important piece of the insurance puzzle, it also pales in comparison to the more valuable coverage for bodily injury. Insurance companies have been targeting bikers for decades with promises of “full coverage.” The problem is that the policies sold to bikers often only have $25,000 coverage for bodily injury. This is the minimum coverage required by South Dakota law, and will barely cover the cost of the ambulance ride in the event of a crash. Your responsibility as a motorist in South Dakota includes a financial responsibility for injuries you cause on the road. Having only $25,000 in coverage means that in the event of a substantial accident, your personal assets are at risk to cover the costs for the injuries you’ve caused. The difference in premium between a $25,000 policy and a $250,000 policy is miniscule compared to the difference in having injuries covered by insurance or your own personal assets.
The other, even more significant, value of having a $250,000 policy means that if you are injured and it’s the other guy’s fault, you will have Uninsured/Under Insured Motorist coverage in the amount of $250,000. If the other driver has a $25,000 (or worse, no coverage), your policy will cover your own injuries for $225,000. This will provide you a pool of money to cover costs for medical bills, lost work, and out of pocket expenses, that would not be available under the “full coverage” $25,000 policy sold to so many bikers.
Bottom line: before you take your dream ride to Sturgis this year, talk with your insurance agent to make sure that your “full coverage” includes coverage for bodily injury that will meaningfully protect you and your family.