Motorcycle Insurer Priority in Accident Claims

Which insurance company pays no-fault benefits to an injured motorcyclist?

When a Michigan motorcyclist is injured in a collision with a motor vehicle, the motorcyclist can be entitled to no-fault personal insurance protection (PIP) benefits. If that is the case, the motorcyclist must determine which insurer is obligated to pay those benefits. The Michigan no-fault code outlines the appropriate motorcycle insurer priority and defines a very specific order of obligation for paying these benefits.

Which insurance company pays no-fault benefits to an injured motorcyclist?

The law instructs that the injured motorcyclist must look to certain insurers in a specific order of priority. Benefits may not be collected from an insurer unless all of the previous options have been exhausted. The order of priority is:

  1. the insurer of the owner or registrant of the motor vehicle involved in the accident.
  2. the insurer of the operator of the motor vehicle, if that operator is someone other than the owner or registrant;
  3. the no-fault insurer of the injured motorcyclist, if that individual is insured under a no-fault policy on another vehicle;
  4. the no-fault insurer of the owner or registrant of the motorcycle, if such a policy exists.
motorcycle helmet

If no coverage is available at any of these levels, such as instances of hit-and-run motorcycle accidents, an injured motorcyclist may claim benefits through the Michigan Assigned Claim Facility (MACP). The injured person will have his or her claim assigned to a Michigan licensed and registered insurer who will have the obligation to pay benefits pursuant to the Michigan No-Fault Law. Notably, under the 2019 no-fault reforms, any injured person claiming benefits through the MACP only has $250,000 of medical expense coverage and no longer has the right to lifetime benefits they had prior to the reforms.

Which insurance company pays benefits for injured motorcycle passengers?

You should also understand that an individual injured while riding as a passenger on a motorcycle can seek the same coverage as the operator of the motorcycle, with the same priority system. However, there is one additional layer of coverage for passengers. Injured motorcycle passengers will seek coverage using the priority system listed above. However, if the injured passenger is unable to find coverage through any of those options, that passenger will then turn to his or her own insurer to seek coverage, before looking to the Assigned Claims Facility.

Order of priorities in a motorcycle hit-and-run

As stated, the vast majority of injured motorcyclists will obtain their no-fault benefits from the insurance company of the driver of the motor vehicle involved in the accident. But what happens in instances of motorcycle hit-and-run accidents?

In one recent Michigan Court of Appeals case, the driver of the car fled the scene after impact. Under normal circumstances and according to Michigan’s no-fault priorities, the injured motorcyclist would turn to the insurer of the vehicle involved or the insurer of the operator. However, since it was a hit-and-run and the insurance information was unobtainable, payment continued down the list of priorities, falling to the motorcyclist himself.

This is where the confusion came in. While the motorcyclist didn’t own a motor vehicle, Progressive insured the motorcycle itself. Furthermore, at the time of the hit-and-run, the motorcyclist was living part-time with his mother, who owned vehicles (and therefore a no-fault policy) insured by State Farm. Progressive and State Farm agreed that the motorcyclist was entitled to no-fault benefits. However, they disagreed on who was responsible for payment.

State Farm argued that, because the motorcyclist wasn’t named on his mother’s no-fault policy, they weren’t on the hook for payment of benefits. Progressive countered that, because the motorcyclist lived with his mother, State Farm should pay the no-fault benefits under the “resident relative” provision of State Farm’s policy.

In the end, the Court of Appeals agreed with Progressive. As the “motor vehicle insurer” of the motorcyclist’s mother, State Farm was responsible for the payment. Because of the resident relative clause, naming the motorcyclist himself on the policy wasn’t required. It’s worth mentioning that, had all four priority levels failed, the motorcyclist could have pursued a no-fault claim through the Michigan Assigned Claims Plan. Additionally, motorcyclists may also purchase optional coverage known as motorcycle PIP coverage in increments of $5,000 or more. This coverage will pay for any injuries arising from accidents that don’t involve another motor vehicle or motorcycle hit-and-run collisions.

Motorcycle accident claims can be confusing. If you have questions, call the Michigan motorcycle accident lawyers at Sinas Dramis Law Firm today at 866.758.0031.

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