If you are purchasing a motorcycle or ATV insurance policy, you may notice that bodily injury and property damage are very inexpensive. However, medical payment coverage and uninsured motorist coverage are quite “pricey”.
The reason is that bodily injury and property damage liability covers damage to others and other people’s property. The uninsured motorist and medical payments coverage is coverage for your own injuries. Although these small vehicles cannot cause much damage, the injury to the driver can be severe.
So, what if you took the uninsured motorist coverage on your auto policy and added stacked coverage. Would the coverage extend to the recreational vehicle? It probably would, but the auto company is not intending for their coverage to extend to vehicles that are unlisted on the policy. Rates are based on the risk, but companies only know the risks that are on the policy application. By taking your auto coverage and stacking the limits in order to cover the uninsured motorist coverage for recreational vehicles, the company is not getting the additional premium for the increased risk.
Although this is not fraudulent, it is considered “mischievous” because it is trying to work around the system in order to get additional coverage without the added cost. Although not considered fraud, it is similar to fraud because the end result is higher premiums for all.