The "BLS" is the "Boring Legal Stuff" - all that "stuff" you don't want to think about before you get on your bike ride! However, failing the get your legal ducks in a row - your insurance, estate planning and such - can lead to disastrous results should your next ride leave you injured, unconscious or worse!
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 Teflon floating about the room. The last thing on the touring cyclist’s mind as he/she goes through the Pre-Trip Checklist is the BLS. Unfortunately, failure to consider the BLS of Insurance and Estate Planning can end up costing the touring cyclist time, money and the safety and peace of mind of his family!
PART I - Insurance Issues for the Touring Cyclist
Insurance? You don’t need to worry about no stinkin’ insurance, right? You’re driving 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!]
Health Insurance
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 [2”x3”] baggie with a copy of your ID, emergency contact information and list of medical allergies. Store this on your person – or in your helmet!
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!
Warning: While I have not yet seen this in my “bicycle law” practice, I have learned from my “motorcycle law” practice that some health insurers are limiting the benefits they provide if an insured is injured while riding a motorcycle or engaging in certain other “hazardous sports.” As you might expect, motorcycle groups are up in arms and preparing to do battle. However, under insurance policies in force right now, a motorcyclist can hit by a DRUNK driver and have NO health insurance coverage! If insurers find this effective, you can BET they will apply the concept to cycling very soon! A bill is currently pending in Congress to stop this practice.
Homeowner’s Insurance – Say What?
If you are negligent and ride into a car, a person or anther 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!
Auto Insurance – Medical Payments Coverage
Why would you need to take information about your automobile insurance policy on a 3 week bike ride? 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.
Auto Insurance – Uninsured/Underinsured Motorist Coverage
The “uninsured” [UM] part of this is obvious. If you are struck by motorist who simply 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.
Are you carrying an Umbrella?
Do you carry any type of excess or umbrella insurance? These types of policies are designed to fit over the top of all other policies and only come into play when all other available insurance is used up and you still have losses. An umbrella policy is usually written with large policy limits - $500,000.00 or more. I advise ALL bike riding clients to consider an umbrella policy. These are typically very inexpensive policies and, in that once-in-a-lifetime situation, can save your financial life!
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 - $12,500.00. The client’s medical bills were in excess of $80,000.00and his wage loss was over $40,000.00.
Fortunately, the cyclist had $300,000.00 “underinsured motorist” coverage and $10,000.00 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 $1.0 million 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!
PART II – Estate Planning for the Touring Cyclist
Why does the bicyclist need to worry about “Estate Planning?” What the heck IS “Estate Planning” anyway? Sounds rather vague and morbid – something for rich people!
“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” should also be prepared.
Most people want their estate plan to provide financially for their surviving spouse, protect their assets, insure that their children are physically and financially cared for, minimize cost & 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! “Advanced directives” are prepared in case you become unconscious or unable to make your own decisions.
Here’s a little “12-Step” program for getting the BLS of Estate Planning done in YOUR life!
1. Have a will prepared
2. Consider whether a trust is necessary
3. Have health care directives prepared
4. Execute a financial power of attorney
5. Protect your children's property
6. File beneficiary forms
7. Consider life insurance
8. Understand estate taxes
9. Cover funeral expenses
10. Make final arrangements
11. Protect your business
12. Store your documents
Your Will & Trust
I think many adults fear “making a will” more than death or dealing with a life insurance agent! 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 – you are committing “Parental Malpractice” if you don’t!
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 age18. Failure to have a will or trust prepared can cause your estate to incur taxes of expenses which could be avoided. If you fail to follow these rules exactly, your wishes may be ignored by the Court.
Trusts: Not Just For Millionaires
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!
Powers of Attoney
What are POA’s?
A Power of Attorney [“POA”] is a legal document that gives someone ELSE the power to make decisions for you when you cannot. POA’s are of critical importance to the bicyclist
Financial POA
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.
The Schiavo Case & “Advanced Directives” in Estate Planning
The Terry Schiavo case was a real medical and legal wake-up call for many Americans. Terry Schiavo was a young woman in a coma. She was not “terminal” but had never prepared written instructions advising health care providers how she wanted to be treated. The public battle between her husband and her parents caused many states to pass laws permitting or formalizing such “advanced directives.”
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.
Your should definitely have these “advanced directives” in your estate planning package!
Summary
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 & advanced directives, for any extended cycling trip. I guarantee that you will sleep better in that hot, sticky tent you set up in rain!
Good Luck & Good Riding!
