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Insurance Update: Balance for Cyclists Wins National Award
We at the League are often asked about insurance for bicyclists -- How does it work? How can I get it? Is it expensive? Last year, we explored the options in an article in American Bicyclist magazine — and wanted to keep you updated on the latest in the world of bike insurance.
Recently, Jay Paul, the creator of Balance for Cyclists was honored in the 2013 National Underwiter Industry Elite Awards, which highlights best practices in the life and health insurance industry. We caught up with Jay about the insurance program, his award and what bicycling means to him.
Why do you ride a bike? What started your interest? What kind of riding do you do now?
I ride a bike for the sense of freedom it gives me. There is nothing better than being on the open road or navigating city streets on two wheels. I am a moving part of the landscape and climate, a feeling one never experiences as the driver of a car, I love it. I started riding in my Richmond, Va., city suburb as a child. In first grade I rode my bike to school. I have never stopped since then. My first bike had hard rubber wheels and I rode that thing two miles to school each way. In middle school I had a paper route and delivered them on a bike I still ride today at a city commuter, it is a Schwinn Speedster.
Today I have 4 bikes. I still race (if you want to call it that) my mountain bike, I do a few road and off road triathlons annually, at least three charity century rides, and usually at least two destination rides. In between I’m riding for training, pleasure and as a method of transportation. My favorite spots to ride are mountain biking in Whistler, BC or The Colorado Trail, road riding on The Blue Ridge Parkway, racing Xterra’s wherever and whenever I can find the time. My next ride is in two weeks and it’s the Great Allegheny Pass and C&O Railroad, effectively 350 miles from Pittsburgh to DC.
How did you conceive of the idea for this insurance coverage?
I came up with the idea of our Balance For Cyclist product by watching a number of friends struggle with finances after suffering permanent injury as the result of cycling accidents. We’d hold fundraisers on their behalf and never raise enough money to really help them in any significant way. As an insurance professional I knew that I could create an insurance coverage to protect our cycling community. The demographic of cyclists is certainly large enough to support cyclist specific insurance. Our market analysis suggested that most cyclists have health insurance. However, even the best health insurance is very limited for injuries that result in long term medical needs. The people I knew who had suffered critical injuries needed night nurses, long term physical therapy, home modifications, travel expenses to specialty centers, their own lost wages and the lost wages of family members who stayed with them. There are dozens of other expenses just not covered by health or disability insurance. My goal was to get cash quickly into the hands of cyclists who suffered these serious injuries. Some folks said, “Can't cyclists sue whoever hits them?” My response is that only 30 percent of serious cycling accidents involve a motor vehicle and that in 50 percent of those accidents the cyclist is at fault. One cannot sue in those situations. In certain states there is no fault insurance, but in many cases these the limits of coverage are low. Regardless, suing and getting legal relief can take years. Again, I want cash in the hands of cyclists quickly after they suffer a serious injury. It doesn’t matter where you are from, if you are part of the cycling world you are welcome!
What has the reaction been from the bicycling community?
Our response from clubs, associations, and bike shops has been very positive. We work with a lot of associations, clubs, and rides by working as a sponsor or affiliate. All of these relationships have been quite good. I personally have been very engaged in cycling advocacy over the years serving in leadership roles in a number of cycling organizations. I was Chairman of The Virginia Capital Trail Foundation and helped raise $50 million to build a trail in Virginia. I am currently on the Board of Bike Virginia and Richmond 2015. The cycling family is my family. Being so close to the cycling community I have no difficulty talking with other groups. If they are not interested in working with us, we certainly understand and move on. The vast majority have been very enthusiastic of our efforts. In the last year I have been attending summits, expos, rides, and races across the country. Its’ has been a great experience and I’ve met dozens of wonderful people from the cycling world.
What does it mean to you to have been awarded this honor?
Our first challenge was getting an insurance carrier to back us on the actuarial work and policy form wording that we created. Zurich American Insurance stepped up big on our behalf. Then we had to get insurance regulators to approve the policy forms we created. The insurance industry is very slow to create new products. Coming up with acceptable wording for the first coverage for Severe Traumatic Brain Injury was huge for the insurance industry. We wrote that definition and today the only people who can get coverage for STBI are cyclists through our coverage. In addition there has never been accident insurance coverage available to individuals for participating in just one activity, in this case cycling. The closest thing we have found is the Diver Alert Network (DAN) for scuba divers who suffer the bends. To win this award was very validating for our efforts on behalf of all cyclists.
Where do you go from here?
We are currently approved in 39 states. We are hoping to be in at least 45 before the end of the year. Certain states are just slow to respond. None have said they do not like our concept. Our goal is to create a sustainable insurance coverage for individual cyclists. We are also working on innovative coverage for cycling events. Our mission is to help make our streets, roads, and trails safe and accessible to all cyclists. We do this through funding advocacy efforts of organizations like the LAB. If we could make it so there was no need for our insurance coverage that would make my day.
Our coverage is not for every cyclist. However, those cyclists who worry about what might happen to them and their families if they suffer a permanent injury as the result of a cycling accident will find comfort in knowing that we as cyclists can protect ourselves for not much premium.