Behind the Wheel or the Handlebar, Loss Severity Is a Driver

May 20, 2015| Von Renate Jordan | Auto/Motor, Personal Umbrella | English

Region: U.S.

May is National Bike Safety Month, which coincidentally follows National Distracted Driving Awareness Month. Government statistics on bicycle accidents and injuries tell a story echoed in our claim files. Would it surprise you that the Governors Highway Safety Association (GHSA) reported a 16% increase in fatalities from bicycle accidents between 2010 and 2012? This follows a long period of decline. As a point of comparison, deaths from motor accidents grew by only 1% in the same period.

You might wonder what generates this increase. According to studies and claim files, alcohol impairment and distractions seem to be the leading causes. This is true not only for motor vehicle drivers involved in accidents but also for cyclists. In fact, 28% of bicycle riders over the age of 16 had high blood alcohol levels, according to the GHSA study. 

Territory may also play a role in loss frequency according to GHSA. Six states - California, Florida, Illinois, New York, Michigan and Texas - accounted for 54% of all fatalities in the 2010-2012 periods. California and Florida led the pack, and had the highest rate of increases. Warm weather surely beckons more bike riders in those states, but that does not necessarily explain how Michigan and Illinois make their way to the top.

Pedestrian fatalities from auto accidents are increasing as well. San Jose, California reported 21 pedestrian fatalities in 2013 alone. This is the highest number since the city started counting these accidents in 2005. The key factors attributed to the deaths were jaywalking and inattention; alcohol/drug use got a mention, too.

Our Personal Umbrella Cause of Loss study highlights the high cost of bicycle accidents as well as pedestrian and motorcycle crashes. Our claim sample is made up of auto drivers whose primary auto policy limits were depleted, necessitating payment by their Personal Umbrella for part of the loss. Based on our most recent 2005-2010 analysis:

  • 32% of auto-related claims and 25% of all Personal Umbrella claims involved bikes, pedestrians or motorcycles.
  • When an auto hits a bike, pedestrian or motorcycle and the loss involves the insureds umbrella coverage, the average total incurred loss (primary + umbrella) ranges between $700,000 - $1,000,000.

Severity is the story here. Even with the best safety equipment, riders are vulnerable to serious injuries and most bicyclists - 66% according to the GHSA - were not even wearing helmets.

This leads us to ask: How much Personal Umbrella limit should an insured purchase? Certainly any driver without Umbrella protection should buy a policy. Based on the PU specific loss statistics, however, the most common $1 million Umbrella limit might not be enough to cover serious collisions with bicyclists, motorcyclists and pedestrians. Maybe it’s time for an insurance check-up to ensure adequate protection.

With summer coming, expect bike riders, pedestrians, motorcyclists and auto drivers to be out in droves soon. Hopefully, they will all be careful and follow the rules of the road, but should an accident happen, ensuring adequate insurance protection is the prudent thing to do!


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