Can’t you just picture it — maps laid out, clothes folded ready to be loaded into waiting panniers, bike all tuned up, the smell of chain lube wafting about the room? The last thing on the touring cyclist’s mind as they go through their pre-trip checklist is the BLS (Boring Legal Stuff ).
Unfortunately, failure to consider the BLS of insurance and estate planning can end up costing the touring cyclist time, money, and their family’s peace of mind. Insurance? You don’t need to worry about no stinkin’ insurance, right? You’re riding a bike for two weeks, not a car … what can possibly happen? (For this part of the article, let’s assume you are staying inside the United States — things really get crazy in the insurance world when you cross sovereign borders.)
First and foremost, before you leave the house make sure you are carrying all of your health insurance information. Keep it close at hand — better yet, pack your insurance card, or a copy, in a small baggie with a copy of your ID, emergency contact information, and list of medical allergies. Store this on your person.
If you are hurt on the road, unable to communicate, and need emergency care or serious medical intervention you do not want healthcare professionals wondering who you are, who to contact, and whether or not you’ve got health insurance.
If you are negligent and ride into a car, a person, or another cyclist, your homeowner’s insurance can provide liability coverage to pay the claim. If you are going on an extended trip, take your agent’s phone number and your policy number. If someone claims you did something wrong, causing them loss, damage, or injury, you will need to file a claim right away.
Why would you need to take information about your automobile insurance policy on a long-distance bike ride? Because if you are injured in a crash with a motor vehicle you may find some financial assistance buried within your automobile insurance policy. Your auto insurance may provide “medical payments” coverage. This coverage pays your medical bills if you are in a crash with a car.
Warning: Recently, I came across the first automobile insurance policy I have seen which specifically limits “medical payments” coverage and excludes paying medical bills if you are hit by a car while riding your bike. You may want to ask your agent if you are covered in such a scenario. If the agent says “Yes” then immediately fax or email a letter to the agent (and keep a copy) restating your question and the answer and thanking him for his advice. Even if the agent is wrong, your letter/email may serve to extend coverage as an agent’s statements about the extent of coverage may bind the insurer.
The uninsured (UM) part of this is obvious. If you are struck by motorist who has no insurance, your UM coverage should pay your injury claim just as if it was the motorist’s coverage, even though you are on your bike. The underinsured (UIM) may not be so obvious. If the motorist who hit you has some coverage, but not enough to pay the full value of your claim, your policy’s UIM coverage may be used to pay more towards your claim, depending on your policy limits. I advise my cycling clients to buy as much UM/UIM coverage as they can afford. It protects you in the event you are injured by an errant motorist.
Real life insurance example: My client, a physician who rides all the time, suffered a dangerous neck fracture in a crash caused by a motorist. The motorist carried Ohio’s state minimum auto coverage — $12,500. The client’s medical bills were in excess of $80,000 and his wage loss was over $40,000. Fortunately, the cyclist had $300,000 underinsured motorist coverage and $10,000 in medical payments coverage. We used the medical payments coverage to cover the co-pays for his surgery and other treatment. He also maintained an excellent disability insurance policy that kept him afloat financially while he was off work. Finally, he had an umbrella policy with 1,000,000 limits. Since the value of his claim exceeded the $300,000.00 UM/UIM limits, his “umbrella” was available to pay the balance. From an insurance perspective, he was well-prepared for the once-in-a-lifetime event that came out of the blue.
Why do cyclists need to worry about estate planning? What the heck is estate planning anyway? Estate planning for most of us (us non-millionaires, that is) generally consists of having a will prepared, as well as possibly a trust. Even more important for the bicyclist, advanced directives, which are prepared in case you become unconscious or unable to make your own decisions, should also be prepared. Most people want their estate plan to provide financially for their surviving spouse, protect their assets, ensure that their children are physically and financially cared for, minimize cost and taxes, and avoid probate. Other goals may include providing for children of a prior marriage, making sure that business interests are taken care of, providing liquidity to pay bills and taxes, and avoiding family conflict and strife.
Here’s a little “12-Step” program for getting the BLS of estate planning done in your life:
I think many adults fear making a will more than death itself. The thought of talking about end-of-life issues scares many people and prevents them from getting their will done. However, the legal effect of not dealing with these issues should scare you even more. Everybody needs a will.
In a will, you state who you want to inherit your property. You also name a guardian to care for your young children should something happen to you and the other parent. If you have minor children, you should have a will, no question about it.
Each state has a law that tells you who gets your stuff if you die without a will. Typically, the probate court judge determines who will take care of your children until they are 18 years old. Without a will, most state laws give your young children possession of your entire estate, including all life insurance proceeds and such, at age 18. Failure to have a will or trust prepared can cause your estate to incur taxes or expenses which could be avoided. If you fail to follow these rules exactly, your wishes may be ignored by the court.
A trust is also a legal document. In one simple form, a trust can hold your assets until your children reach an age at which you feel they can handle the assets with appropriate care. Giving the proceeds of a half-million dollar life insurance policy to a newly turned 18-year-old is a scary thought! Trusts can be very simple or very complex and can be extremely diverse in what they do. Discuss whether a trust is right for your situation with your estate planning professional.
A “power of attorney” is a legal document that gives someone else the power to make decisions for you when you cannot. A financial POA gives the person of your choice the power to access your bank accounts, pay your bills, or do anything else financially that you could do. The financial POA must be signed when you are competent. If a crash renders you unable to make financial decisions, it is too late to create a POA — your assets may be frozen, unavailable to your spouse or family, and your bills might go unpaid or your credit could be damaged.
A “Power of Attorney for Health Care” is a legal document that authorizes another person of your choosing to make health care decisions for you if you are unable to make informed decisions on your own. A “Living Will” is a document that contains your written wishes and instructions for care at the end of life. You can state your preferences regarding aggressive life-prolonging treatment. You should definitely have these “advanced directives” in your estate planning package.
Every touring cyclist needs to consider the BLS right away. Pack your insurance and emergency contact information in your panniers, as well as copies of your will and advanced directives, for any extended cycling trip. I guarantee that you will sleep better in that hot, sticky tent you set up in rain.
Steve Magas is an avid Ohio cyclist and trial lawyer whose practice focuses on protecting the rights of cyclists. Steve’s Bike Law practice has been featured in Lawyer’s Weekly USA, Cincy Business, Cincinnati magazine, and the Cincinnati Post.