Let's face it. Bikes are dangerous. If you stack it and get hurt, do you have the right insurance? Here are some tips from our resident guru, Lawrence Kennedy...
It is one of the most common types of personal insurance yet one of the most misunderstood. Not all policies are created equal and the devil is in the detail.
Being passionate riders ourselves at Surety Life we understand the risks and can arrange insurance taking into account your specific situation after a thorough review.
When it comes to insuring a professional rider, or anyone with a risky occupation, professional advice and help is imperative.
What do I need to look out for?
- Self-employed, how is your business structured
- I’m covered by my superannuation
- Own occupation or any occupation
- Benefit period
- Waiting period
- Exclusions
Self-employed, how is your business structured
You have a great accountant that has set you up in a way that gives you maximum tax efficiency. Let’s say you bring in $100,000 per annum but through clever accounting and structure you show only $25,000. If you’re currently insured for $100,000 or $1,923 per week there is a chance you are over insured.
Why? It is likely the insurer will base any monthly payments on your tax certificate, if you’re only showing $25,000 of taxable income then you’re probably going to only get paid a quarter of what you think. There are ways to address this with an insurer and have agreed value, you need to speak with an advisor.
You need to take into account things like time off for ongoing medical treatment. Who will cover your work and lost wages during that time? It can all add up quickly…
I’m covered by my superannuation
Are you really? Insurance through superannuation funds can have harsh definitions and policy conditions when compared to policies placed through an advisor.
Own occupation or any occupation
What if you have a bad accident and can no longer continue in your field of expertise? If you are on an “own occupation” policy wording, you’ll be looked after for the entire benefit period. If you are on “any occupation” that means as soon as you are capable of undertaking “any” paid work your benefits stop.
Benefit period
How long do you want income protection to pay you out for? Some only provide 52 or 104 week benefits, if you have a particularly nasty accident is this enough time? We have option that can cover you to age 65 or longer than a 104 week period.
Dave McKenna – stunt rider. Some occupations are way more risky than others…
Waiting period
The waiting period is like an excess, it’s the period of time you wait before your benefit is paid. Typically speaking the longer the waiting period the more competitive the premium, you need to consider sick leave from work and other entitlements before deciding on a waiting period. Some policies also have a clause that states you must use all holiday and sick leave before the benefits are paid.
Exclusions
Does your current policy exclude riding altogether or is it restricted to only gazetted roads? If you undertake track days or trail bike riding there may be exclusions and these may only be referred to as hazardous activities, be diligent when reviewing your policy terms and conditions.
Next column we’ll cover some more important topics, until then, enjoy your riding – Lawrence
Surety Life Disclaimer: The information contained within, including taxation, does not consider your personal circumstances and is of a general nature only. You should not act on it without first obtaining professional financial advice specific to your circumstances and reading any product disclosure statements.
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