The "Full Coverage Insurance" Myth
This one is actually more of a scam by insurance companies than merely a myth. Ask bikers what insurance they have and the vast majority will reply “full coverage.” Ask what that means, however, and the answers will range from “everything the law says I need” to “I have no idea.” What the vast majority actually have are the statutory minimum for liability and property damage. Those limits are $25,000 per person or vehicle, maximum of fifty thousand per incident. O.C.G.A. § 33-7-11.
What do you get if the driver in the “cage”, who, as usual, turns left immediately in front of you and breaks your bones, knocks you out of work for a year or so and leaves you with a permanent disability has that same “full coverage”? Twenty-five thousand dollars maximum. What do you get under your bike insurance policy for your injuries? Nothing. What if the other driver has no insurance at all? You get the same from your insurance company, which is nothing.
“Oh, but I have health insurance that will get me the medical care I need.” Great if you do. But guess what? That insurance company is going to have its hands out to gobble up every penny you get so they are “reimbursed” for whatever they had to spend to get you that medical care. Of course, they won’t be returning the premiums you paid for that coverage.
So how do you deal with this incredibly huge risk that could cost you everything? Pretty easily and for not much money. What the insurance companies rarely explain is that there a category to cover you for your injuries caused by uninsured or “underinsured” motorists, called “UM” coverage. Uninsured motorists, obviously, have no insurance. An under insured motorist however, is one who has less coverage than you do. That means if you get hit by someone with one hundred thousand dollars in insurance and you have three hundred thousand, you have another two hundred thousand available.
We advise all our clients to get the maximum amount of UM coverage available. Those that have checked were surprised to find that it costs very little. One of our clients increased the family coverage on three motorcycles to one hundred/three hundred thousand. It only cost an extra sixty dollars a year. Another client with a poor driving record figured it would be too much. He was wrong-he now has up to five hundred thousand dollars of coverage at a cost of seventy-five dollars per year.
There is other available coverage. Suppose you have a separate policy on your car. That coverage can be “stacked” on top of the other policies. If you have more than one car and a separate policy on each, you can toss all of them on the pile.
How do you deal with the claims of your health insurance provider when they ask for the money back? With the law, of course. There is a statute in Georgia that applies to most policies issued in this state, O.C.G.A. § 33-24-56.1. It provides that the insurance company is not entitled to recover anything unless you have received “full and complete compensation.” That means everything to which you are entitled under the law, not just lost wages and medical expenses, but pain and suffering, disability, future costs of care or diminished earnings and scarring and disfigurement, among other things. Even if you have been fully and completely compensated, the insurance company is responsible for a share of the attorney’s fees and expenses of the case.
Of course, every case is different, and different law, such as federal law
under ERISA, may be involved. The foregoing is just a general summary of some
of the relevant statutes and cases. It does not constitute legal advice. You
must consult a lawyer to know if any, and how much, of the foregoing applies
to you.