What Every Motorcyclist Needs to Know
Don’t Get Caught in the No-Fault Trap for Motorcycle Insurance
Every motorcyclist knows that the road holds many traps: the edge trap where different levels of pavement meet, oil around a curve, or the opening door of a parked car. But there’s another trap for Kentucky motorcyclists that probably resides in your own back pocket—your insurance card.
About No-Fault Insurance in Kentucky
A little background is in order. Kentucky is a no-fault insurance state. In our version of the statute, every auto insurance company must include Basic Reparations Benefits in every automobile policy sold in the state. That law says that your own auto policy has to cover the first $10,000 of your lost wages or medical bills from an accident (or those of a pedestrian you hit), no matter who’s at fault. This was intended to reduce the number of lawsuits arising from accidents, since now an injured person wouldn’t have to sue to get these basic things covered and for many people these would be the only consequences from an accident.
The flip side (and there always is one) to this benefit is that under no fault, you can’t sue the at-fault party for injuries from an accident until you’ve crossed a threshold specified in the law (which is basically $1,000 in medical bills, a broken bone, or some permanent injury), AND you can’t recover in a lawsuit anything that is paid or payable under the no fault provision.
Auto vs. Motorcycle Coverage: One Important Difference
Therein lies the trap. Under the statute, automobile insurance cannot be offered in Kentucky without including the no fault benefit, but motorcycle insurance is exempted. That means that no fault is an optional coverage for motorcycles, one you must pay for separately if you want to have the benefit. If you do not have, or do not formally reject, no fault coverage on your motorcycle insurance, you have in effect a $10,000 deductible for recovery of medical expenses and lost wages from the at fault party in a motorcycle accident.
This means if someone makes the typical left turn in front of you at an intersection, runs up your taillight at a stop sign, or does any of the other remarkably dumb things drivers often do when they “don’t see” a motorcycle, and you are injured, you will not have access to your own insurance for recovery of your medical expenses and lost wages, and you will not be able to recover those elements of damages in a lawsuit against the other driver who was at fault for your injuries. Let me make that perfectly clear: even if you obtain a judgment against the other driver in which a jury awards you $10,000 for a combination of medical expenses and/or lost wages, the court will deduct $10,000 off the top, leaving you zero.
Because your right to sue someone who has injured you is constitutional, the legislature left an out in the no-fault law. There is a form that insurance agents have available by which you can reject no-fault, either for all coverages or for motorcycles only. If you sign this form, you can retain your right to recover all of your damages in a suit against the other driver. Signing the form also may expose you to some risk (for example, you will not be protected by the threshold language from suit by the other driver, but in that case, your own liability insurance kicks in).
Make Sure You Do One or the Other
If you sign the form to reject and do not purchase the no-fault, you will not have the benefit of the insurance to pay for your medical expenses and lost wages, but if you have adequate health insurance and disability insurance through work or otherwise, you may not need the additional coverage. If your health and disability insurance is a work benefit, then that insurer may be able to subrogate against your award, thus collecting it anyway. There is no right or wrong answer to the question of whether you should purchase the coverage or reject. The cleanest, most simple way to do it is to buy the coverage, though it can be expensive, particularly if you have multiple bikes. It is an individual decision, based upon your own circumstances.
You should get advice from your agent, and perhaps an attorney, before you make the decision to sign it or not. But the choice is very clear in one respect: you must either sign the rejection form or purchase the additional no-fault coverage. If you do not do one or the other, you are in the trap.
Beware: Personal Injury Protection vs. Pedestrian Injury Protection
There is at least one more thing to check. Insurance companies in their policies usually refer to the no-fault coverage as PIP, an acronym for personal injury protection (rather than the basic-reparation-benefits language used in the statute). In some motorcycle policies however, PIP can also stand for pedestrian injury protection, which is a slightly different version that does not provide the benefit to you but rather only to a pedestrian who is injured by your motorcycle.
This will leave you still in the trap if you are injured, even if you think you’ve paid for an extra coverage. If the premium for PIP on your declarations page isn’t substantial, it’s probably the pedestrian variety. That’s a good coverage to have, but doesn’t keep you from the bind described above. Be sure when you purchase your insurance that you know what you’re buying and if there’s any doubt, make your agent explain it carefully. If he or she can’t do that, get another agent.
The above is not intended to be individual legal advice to anyone and it is certainly not a comprehensive treatise on either tort or insurance law. It is intended only to inform motorcyclists of a situation that exists, one that each person must investigate and decide upon for him or herself. Just as not knowing what to do when the surface changes, the car door opens or the dark spot on the pavement turns out to be oil, not knowing what’s in your back pocket can hurt.
Our goal is to provide the highest quality legal services to you and your business in a timely fashion. We welcome the opportunity to talk with you and to discuss how we may be of service. Contact us with your questions or concerns about a cycle accident or denied claims in central or eastern Kentucky. You can reach our attorneys calling.