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Ask Our Lawyer - March 2011



Q. I have Indiana Farm Bureau Insurance coverage on my motorcycle. I carry high limits so I can get the same limits for uninsured/underinsured coverage in case I am run over by a near-do-well drunk with no coverage and need payment for my loss income etc. My son took the safety course and learned to ride on this bike way back when, and has a perfect driving record. He is now off the family dole and has a job in an other state. When he comes home for a visit and wants to borrow the family Harley, does he enjoy the same coverage as I do when riding the bike?

A. NO, and NO. But change is a coming. As of April 1, your son will enjoy the same coverage as you have when riding. Prior to April 1 this year, your son will be a permissive user only and since he is no longer a member of your household his coverage will "drop down" to the state minimum coverage.

A few articles ago, I reported a discovery of the "drop down" provision that some insurance companies use to the disadvantage of unsuspecting insureds. Who would ever think that when a bike or auto is borrowed by one of your adult children that they would not enjoy the same coverage as you pay for yourself?

In an earlier ASK OUR LAWYER article, I wrote about my discovery of the drop-down provision and my surprise and concern I believe this article caused Farm Bureau to change it's ways and provide the coverage that we all thought we had anyway. I salute them for this decision.


Q. Rod, I read your article about the person who lost a bike in a garage fire only to discover that he did not have coverage for that bike under his home owner's policy. In that case, the insurance company pointed to an exclusion in the policy that disallowed coverage for loss of the bike in a fire. The insurance company took the position that even thought the bike was being restored, that it was excluded under the home owner's policy and needed a separate policy as a functioning vehicle. You advised us to request that the bike be placed on an additional schedule much like other valuables out of the ordinary, e.g. gold coins, valuable jewelry, rare guns etc - especially if the bike was in pieces or in the process of being assembled. Guess what? When I tried to do that my insurance company insisted that they would only cover the bike we are restoring if we insured it as an operating motorcycle. What gives and what can we do?

- ABATE of OHIO member.

A. We need to educate our insurance companies much like we did with Farm Bureau. It makes no sense that when we have a bike in the process of being assembled or put together from swap meet parts, that we can't get coverage for parts that we obtain over a period of time. Certainly we can't plate a bike like that until it meets state standards. For bikes that are eligible for plating, consider listing the most valuable parts i.e. transmission, engine, tanks and frame on your home owner's policy. If the insurance company is dug in on insuring the bike as a motor vehicle, consider a company with seasonal insurance, so you do not have to pay for liability coverage while the bike is in an un-restored condition. I would also have that company assign a value to the bike especially if it is a vintage bike. Let me know if this works.


Waivers, waivers and more waivers.

You can not have too many waivers ( releases and hold harmless agreements). Tis the season of our motorcycle activities and as such we need to be ready to present to the attendees what amounts to be our silver bullet, our parachute, our get out of jail free card, OUR SUPER INSURANCE POLICY THAT WE CAN AFFORD, and our legal defense to claims that can be avoided with a properly executed waiver. This legal document works if done correctly, but it has to be done correctly as the law strictly construes such waivers of rights. This is the way it should be. When we host an event, we ask that all attendees sign away their rights to sue us, make claims against us and indemnify us for any expense we incur to resist such claims when a waiver has been signed.

Behold: The Ten Commandments of waivers, releases and hold harmless agreements

1. Be familiar with every point in the waiver. The current waiver will be posted on the website. (If you have questions call or email Rod Taylor).

2. Appoint a waiver overseer to direct the process of signing and processing the waivers.

3. Examine photo identification and compare signatures (this may be discretionary in some instances).

4. Waiver overseer shall initial properly executed waivers at the time of execution ( this is so Abate can obtain an affidavit verifying the authenticity of the signature should that become necessary after an incident).

5. Secure waivers after confirmation (detailed instructions will be provided on website).

6. Transfer waivers to event person assigned to hold waivers from the event.

7. In the event of an incident (however slight) notify head of event and Rod Taylor at Abate Legal.

8. Secure waiver of the alleged injured person and make copies to be faxed and emailed to Rod Taylor at Abate Legal.

9. Original waiver is to be retained by waiver overseer until further instructions from Rod Taylor. Do not mail the waiver anywhere, and guard it with your life, as it may be ABATE'S silver bullet etc. to avoid litigation.

10. Get names, addresses and telephone numbers of all witnesses. Call Rod Taylor with those ASAP. Remember that long ago Gen. Forrest said it best – the firstest with the mostest wins.

WHY WE DO WAIVERS--A CASE IN POINT (the names have been omitted to protect the innocent)

Many years ago, a horrible incident occurred at an SMRO's event. The event was tragic and we all felt for the family involved. We had no insurance - hence the reason for the waiver. And fortunately, the injured person had signed a waiver. His injuries were so severe and permanent that he would never work again and he would require life time care. Even though the SMRO had done nothing wrong, we all know it only takes a lawyer with very little to do to file a law suit. You can only imagine the scramble we had looking for and identifying the waiver that was signed by this unfortunate person. Going through several hundred waivers after the fact is a lesson in panic, but we found and identified it.

I am sure if it had been left to the claimant he would not have hired a lawyer, BUT his representatives did. And not just any lawyer. They hired a former Supreme Court Justice no less. Talk about pucker factor in getting a call from that guy. I explained to the former Justice that we had obtained a waiver from his poor soul client and pitched that it was valid, and therefore his client had no claim for that reason and also for the reason we did nothing wrong. Of course, he demanded to see this waiver and examine it in order to determine its enforceability. He reminded me that such documents are not favored in the law for obvious reasons and felt that most were not "worth the paper they were printed on."

I received a call from the former Justice. The pause waiting for him say something -- anything -- was LONG. As with most lawyers, the last thing he said was the point of the call. He had read our waiver and agreed that his client had no case. He was closing his file and thank me for providing the YELLOW HIGHLIGHTED waiver so quickly. Moral of the story -- WAIVERS WORK IF DONE CORRECTLY. IN OTHER WORDS, ABATE WILL LIVE TO RIDE ANOTHER DAY.

Ride Safe and Free,
Rod Taylor
ABATE Legal Services

Remember, injured ABATE members pay only 28 ½% of total recovery and expenses as approved by client, consistent with and conforming to applicable state law. Elsewhere, you may pay 33 ⅓%, 40% or even 50% of your recovery. And, ABATE members are not charged for recovery of damage to your motorcycle, and have access to a 24-hour toll-free telephone number.

Call us at (800) 25-RIDER

If you have any questions you would like to ask the lawyer, please submit them to ASK OUR LAWYER, at rodtaylor@abatelegal.com. © 2011, A.B.A.T.E. Legal Services