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I had biked to work yesterday in Greenbelt. I was in a meeting in another building when the quake occurred. After an hour or so of not letting people back in the buildings they decided to send us all home. My ride was parked in my office. Once I was able to get my wheels the ride home was nominal.

Re: insurance case,

Every state's minimum insurance requirements are dreadfully too low. In this case the motorist had $100,000 liability (not insignificant) but his own insurance company valued the damages to the cyclist to be $375,000 - $475,000.

And this from simply pulling in front of a cyclist.

What I get from this is:
1) Minimum liability insurance needs to be raised several orders of magnitude.

2) Perhaps we should have a new liability insurance component that specifically covers damages to person(s) who are NOT motorists (and by virtue of not having several tons of steel protection suffer greater injury).

I would set a liability requirement for damages to non-motorists to be several multiples of the existing liability minimum limit.

Keeping in mind that a car - car collision at 25 MPH likely will not injure any of the occupants while a car - pedestrian collision certainly will). Actuaries could work out the correct multiple.

What is also apparent from this is the futility of pursuing a claim above the insurance policy limits, even with no dispute over fault and a fairly clear idea of the actual liability. It's truly risk-shifting to the victims and an example of moral hazard in that the irresponsible pay less in insurance premiums and get away with it.

Good points. It's another subsidy of driving, by letting insurance policies undervalue the risk to others by the vehicle operator.

"Natural Woman" is far better than either of them. Jim

I saw the velomobile group during my commute home on the Custis Trail and made a quick video: http://www.flickr.com/photos/btjones/6078239336/

It would be really helpful if someone with a legal background could flesh out the details of the Alaska case.

It sounds like the motorist sued the insurance company for not adequately protecting him, which leads me to believe that the bicyclist is going after the motorist for damages in excess of the $100k?

I think the cyclist settled with the driver for $950,000 but the driver can't be asked to pay any of it. So it is either going to come from the insurance company or the cyclist will be without recourse. The driver has argued that because he has policies on 3 cars, the insurance co should give him 3 times as much coverage (or something like that). I should ask my wife since this is EXACTLY what she used to do.

Thanks, washcycle. I look forward to hearing what you find out.

Rob P --

When an insurance company has a customer who has a claim that exceeds the amount of the policy, there can be a conflict between the insurer and the insured. The company has no incentive to settle, because their exposure is capped either way. They may as well roll the dice and litigate, which is not in the best interest of the insured. And usually the policy requires that the insurance company direct the litigation. So the law requires that insurance companies look out for the interest of the insured.

Simplifying, in this case, the policy limit was $100,000. The company estimated the value of the claim as $375,000-$475,000. The injured party offered to settle for essentially $300,000. The insurance company rejected the settlement offer, and at trial the plaintiff was awarded $950,000. The insured sued the insurance company, saying that their refusal to settle had cost him $650,000. The case hasn't been settled, so far they've just been sparring over the right to sue.

What is most surprising to me is that apparently everyone in this case is in agreement that the cyclist is blameless. Usually there is at least an attempt to blame the cyclist for being on the road.

@JeffB a raise of one order of magnitude would be to $1 million which seems like it would cover this and nearly any other case. A raise of three orders of magnitude would be to $100 million, which seems extravagant.

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