So, if an accident happens to you or a loved one are injured while riding a motorcycle, what insurance do you have to cover you? When is the last time you thought about this? Have you ever seriously discussed insurance coverage with your insurance broker?
Most people think about car/motorcycle insurance as the annoying thing they have to pay for in order to legally drive a vehicle in any province or territory in Canada. So, the lesser the premium rate, the better, right? Wrong!
Our law firm, Mackesy Smye, has been practising insurance litigation in Ontario for over 60 years. Far too often, we are meeting with injured motorcyclists and their passengers who are shocked when they learn of the insurance benefits they are entitled to when they are injured. Insurance is under provincial jurisdiction and so every province and territory has its own insurance scheme.
So, if you or a loved one is injured in a motorcycle accident, what coverage do you have to pay your bills and get the treatment you need? Will it be enough?
Let’s take Ontario as an example and let’s take a fairly common motorcycle driver/passenger profile. Bob and his wife Jane are a couple with a combined after tax income of $80,000 per year. Bob is a self employed electrician and Jane works part time as an office clerk. Both are in good health but neither have extended health coverage through their employment. So, no short or long term disability, no extended health coverage, etc. They have a couple of great kids, they have a mortgage; all the usual stuff of home and family.
One day, Bob and Jane are out on a ride. A motorist suddenly turns left in front of them (sound familiar?). Bob, the driver, cannot avoid a collision. Both Bob and Jane are pretty banged up. Bob is the worst – badly fractured wrist and ankle, both of which require surgery. Jane has significant bruising and tissue injuries through her low back. Because of these injuries, neither can work, at least for the next six months. The motorist is clearly at fault but any claim against him will take 3 to 5 years to resolve. Bob and Jane check into what coverages they have from their motorcycle insurer. They find out that the most they can get for income benefits is 70% of their annual gross income to a maximum of $400 per week. They are both shocked and frightened. Bob’s annual gross income is $95,000. Jane’s is $20,000. Bob is going to be entitled to the maximum $400 per week in income benefits. Jane is only going to be entitled to $269 per week. That’s a total of $669 per week, or $34,788 per year, when they have a lifestyle and debt based on $80,000 per year. How are they going to pay their mortgage? How are they going to pay for their kids’ activities? What happens if the family car needs repairs? What if Bob is off for longer than six months? They now need someone to help look after the house and property. Who will do that and who will pay for it? Jane cannot even get dressed without assistance.
On top of the worry over finances, Bob has a real problem accessing his house because of the severity of his ankle fracture. He has to go up 6 stairs just to get in the door. All the bedrooms and the only shower are on the second floor.
He has been told that even temporary measures to make his home safe for him are going to cost between $30,000 to $35,000. The doctors at the hospital told both Bob and Jane that they were going to require extensive rehab involving physiotherapy, massage therapy and occupational therapy. In Ontario, the government does not pay for these services. Just as they were shocked over the little coverage they had for income benefits, Bob and Jane are shocked over their coverage for medical and rehab benefits. Because Bob had fractures, he is entitled to medical benefits of up to $50,000, but that includes the cost to make changes to his home. But Jane did not have fractures. Her medical benefits are limited to only $3,500.
This type of scenario happens far too often. What people like Bob and Jane don’t typically know is that they could have purchased additional insurance from their motorcycle insurer. They could have purchased more coverage for income benefits and more coverage for medical benefits. The problem is that their insurance agent did not explain this to them. Their insurance agent did not at least tell them how much more it would have cost to buy this extra coverage. It turns out that the cost was not that much.
So here’s some free advice: don’t become a victim of the Bob and Jane scenario. Regardless of what province or territory you are in, talk to your insurance agent and figure out what coverages are available to you and what would work best for you and your family. In doing so, consider:
1. What coverages for lost income and medical do you have from other sources, such as your work benefits? If you don’t have these types of benefits, increasing your motorcycle coverage becomes very important.
2. Do you have mortgage disability insurance where your mortgage will be paid while you are unable to work? Consider talking to your mortgage lender about it. It may be cheaper than you think.
3. If you were injured in an accident and had to be off work for a year or more, what insurance coverages do you currently have and could you financially survive on those coverages?
Talking to your insurance broker about these things costs you nothing. Get a quote, it can’t hurt. But riding with inadequate insurance can hurt dearly.