LEGAL GUIDE
Written by attorney Meaghan Brenner McKay | Feb 7, 2017
By Meaghan Brenner McKay
Feb 7, 2017
The Michigan Motorcycle Insurance Report
The Biggest Insurance Mistakes that Riders Make
INTRODUCTION
My Free Report teaches Michigan motorcycle owners the necessity of purchasing the proper insurance coverage before they go for a ride. All too often, bikers buy what they believe to be "full coverage" for their motorcycle, only to learn later on that they were not sold the essential coverage to protect themselves in the event of a tragic accident. Because injuries suffered in motorcycle accidents are often catastrophic, it is necessary to review your motorcycle insurance coverage immediately to learn if you are properly protected in the event of an accident.
The Michigan Secretary of State has a website dedicated to Motorcycle Laws & Regulations and the requirements to operate a motorcycle in the State of Michigan. The site quickly advises that "To operate a motorcycle on public roads, you must possess a valid Michigan driver's license with a motorcycle endorsement." The Michigan Motorcycle Operator's Manual can also be found at the site.
A motorcycle is defined as a two- or three-wheeled motor vehicle with a saddle or seat that produces more than 2.0 brake horsepower and can attain speeds greater than 30 mph on a level surface. Some vehicles, such as "pocket rockets" or "mini choppers," may meet this definition, but do not have all of the equipment required by Michigan law to legally drive them on public roads and will not be registered by the Department of State.
Under Michigan law, motorcycle registrations are issued for one (1) year and expire on the owner's birthday. You must register your motorcycle at a Secretary of State office if you plan to operate it on public roads. When registering, you will need to provide: Proof of insurance for at least $20,000/$40,000 public liability and $10,000 property damage coverage. This is commonly known as PLPD. For an original registration, you will also need to provide your motorcycle title, and for a renewal
registration, you must provide the renewal notice or the previous year's registration.
In addition, motorcycles must have the following equipment, which must be in good condition: front and rear wheel brakes, headlight, taillight, stop-light, muffler, horn, rear-view mirror, and permanently attached seat.REQUIRED INSURANCE
As stated above, to register a motorcycle, a proof of insurance for the minimum
Personal Liability Property Damage (PLPD) is required. PLPD insurance protects you if you cause personal injury or property damages to another person or other property as a result of your negligence. This means that your own insurance company will defend you for these claims and pay any settlements or judgments due to your negligence.
Failure to have the basic minimum PLPD can and typically does have severe consequences. If a motorcyclist is involved in an accident that involves an automobile and the motorcycle is not properly insured with basic PLPD, then the motorcyclist cannot receive Michigan No-Fault benefits; although they may have other rights against the at fault driver of the motor vehicle.
Michigan No-Fault benefits include but are not necessarily limited to: (1) payment of all medical bills for treatment of injuries arising out the accident; (2) lost wage reimbursement up to 85% of an injured person's gross lost wages (there are monthly caps) for the first three years after the accident; (3) replacement household services up to $20.00 per day for the first three years after the accident (4) mileage reimbursement; (5) attendant care services during the period of recovery.
The repercussion of not receiving Michigan No-Fault insurance benefits after a motorcycle accident is significant because the injuries suffered in a motorcycle accident are often severe and require extensive medical treatment and care. Without these benefits, the injured biker will likely be facing substantial medical bills and will not be receiving payments for lost wages during the period of recovery. This has forced many injured bikers into filing for personal bankruptcy.
This is a simplification of No-Fault benefits, and you should consult an attorney if you are involved in an accident to determine your eligibility for no-fault benefits and other claims. There are strict time limitations and deadlines.OPTIONAL INSURANCE COVERAGE
In additional to PLPD, a motorcycle owner can purchase several optional insurance coverages depending on the insurance carrier. Although this coverage is "optional," it should be considered as mandatory by every motorcycle owner in Michigan. No biker in Michigan should take their bike for a ride without having this coverage in place.
These insurance coverage options protect you in the event you are injured in a serious motorcycle accident. Without these types of coverage, you may never be fairly compensated for your injuries and you may be left facing significant medical bills and expenses for your treatment.
(1) Higher PLPD limits. I recommend that you purchase limits that adequately protect your assets or at least match what you have purchased for your car or truck. At a minimum, you should consider purchasing $100,000.00/$300,000.00 liability coverage, as the cost for purchasing this coverage is
relatively inexpensive.
(2) Medical Payment. This Medical payments coverage, commonly known as MED PAY, is typically purchased in increments of $5,000.00 up to $25,000.00 in coverage. This coverage would pay for medical expenses if you were in a motorcycle accident with another biker, due to a road defect, or even a single bike accident. If you were injured in an accident a car or truck, then you would be eligible for Michigan No-Fault Insurance benefits and your medical bills would be covered for an unlimited amount for your lifetime.
I recommend that you purchase as much of this insurance as you can afford to pay. The MED PAY coverage typically will be primary over your health insurance, meaning that it will pay benefits before your regular health insurance starts to pay, but you must read the policy to confirm this.
If you have no other health insurance, you could be facing huge medical expenses if you do not have this coverage and are injured in a motorcycle accident. Once your medical bills exceed the amount purchased, then the insurance MED PAY coverage is terminated and you are responsible for all additional medical bills. This is why I recommend purchasing the highest amount of coverage that you
can afford.OPTIONAL INSURANCE COVERAGE (CONTINUED)
(3) Uninsured Motorists (UM) Coverage. What is uninsured motorist bodily injury coverage? Very simply, if a motorcyclist is involved in an accident with a car, truck, or motorcycle that is uninsured, then the motorcyclist may pursue a UM claim against his/her own insurance company for their damages, up to the amount of coverage purchased.
This coverage is essential to have because it protects you from uninsured drivers. I recommend that you purchase the MAXIMUM UM coverage available. The reason for this is simple: if you sustain catastrophic injuries as a result of an uninsured driver; then you want the most coverage available to compensate you for your pain and suffering and economic damages. This is especially important because many motorists on our roads and highways have no insurance. To further see why UM Coverage is essential, please read the CASE STUDY below.
(4) Underinsured Motorists (UIM) Coverage. What is underinsured motorists (UIM) coverage? UIM coverage is very similar to Uninsured Motorists Coverage, but it is utilized when a motorcyclist is involved in car, truck, or motorcycle accident with an insured car, truck, or bike, but the insurance coverage is minimal or simply does not reflect the value of the damages sustained by the
motorcyclist.
This coverage is essential to have because it protects you from drivers with the minimum insurance coverage. I recommend that you purchase the MAXIMUM UIM coverage available. For example, in Michigan, a motorist is only required to have $20,000.00 in insurance coverage. Many Michigan motorists purchase this bare minimum coverage. The amount of $20,000.00 rarely, if ever, covers the injuries and damages sustained by a motorcyclist when they are involved in a motor vehicle versus motorcycle accident. This means that a seriously injured biker would only receive a $20,000.00
settlement for his or her injuries.
For example, consider a motorcyclist that sustained damages that are equal to $500,000.00, but the negligent motorist who caused the accident had only $20,000.00 in liability coverage. Without UIM coverage, the injured biker would only receive a settlement of $20,000.00. With UIM coverage, the motorcyclist could file a UIM claim with their own insurance company to seek the difference of the liability coverage ($20,000.00) and the amount of UIM coverage purchased ($500,000.00), meaning they could claim an additional $480,000.00 from their own insurance company. On the other hand, if the motorcyclist only purchased $20,000.00 in UIM benefits, then they would receive nothing from their insurance carrier because they would already have received the $20,000.00 from the negligent motorist's insurance company.CASE STUDIES
THE NEED FOR UNINSURED AND UNDER INSURED MOTORCYCLE COVERAGE
The purpose of this case study is to convey to the readers the absolute necessity of purchasing uninsured (UM) and under insured (UIM) motorist bodily injury coverage. This attorney received a quote from a well known insurance company for $500,000.00 in UM/UIM coverage which cost only $80 per year. This $80.00 purchase can be the difference between receiving no settlement at all or a
settlement in the amount of $500,000.00.
I have had two recent clients that were catastrophically injured in motorcycle vs. car accidents with uninsured motor vehicles. These cases demonstrate the need for purchasing UM and UIM coverage.
Case Study #1-No UM/UIM Coverage Results in Big Settlement
In the first case, John Jones was operating his motorcycle on Six Mile Road in Detroit when an illegally parked tractor trailer did not observe him and pulled away from the curb. John had quick reflexes and was able to avoid the impact with the tractor trailer by driving left of the center lane and immediately swerved back into his lane of travel. Unfortunately, an uninsured car commenced a left hand turn when
she observed the tractor trailer pulling away from the curb. The motorcyclist impacted in a "T" fashion on the driver's side of this uninsured motor vehicle and was thrown over the roof of the same car. John sustained significant injuries including fractures to his arms and legs both requiring surgery. John, who was left handed, lost partial use of his left arm. Nearly two years after his accident, John had to have his hip replaced. Unfortunately, John did not have uninsured (UM) or underinsured motorist (UIM) coverage on his Harley Davidson motorcycle. The car that caused the accident which John impacted did not have any insurance. He would have received no settlement against the uninsured driver of the car even though he was not at fault in the accident.
On his behalf, I filed a lawsuit claiming that the tractor trailer was also at fault and obtained a settlement in excess of One Million ($1,000,000.00) Dollars for John. Also, John qualified for Michigan No-Fault insurance benefits because another motor vehicle was involved in the accident. I assisted him with this claim and was able to get all of his medical bills, lost wages, and other benefits paid.CASE STUDIES (CONTINUED)
Case Study #2-No UM/UIM Coverage Results in No Settlement
In a more unfortunate circumstance, Richard Smith was traveling eastbound on a roadway when an uninsured driver of a car, with a high blood alcohol level, took a left hand turn in front of him and caused a serious accident. Richard sustained severe and permanent damages and was in a coma for over a week. Richard remains hospitalized and conservatively his damages exceed Five Million ($5,000,000.00) Dollars.
Unfortunately for Richard, the drunk driver did not have insurance on his car and this was the drunk driver's third criminal violation for operating a vehicle under the influence of alcohol. The drunk driver had lost his job three months prior to the accident and was in the middle of a divorce. The drunk driver did not have any assets and was essentially broke. Richard did not have uninsured motorist coverage on his motorcycle. He did have this coverage on his car, but his agent did not sell it to him for his bike.
The coverage would have cost about $80.00 and Richard would have purchased it if his agent offered it to him or if he would have read this FREE Report before taking his bike for a ride.
If he had in fact purchased the uninsured motorist (UM) coverage, then he could have recovered up to the amount of coverage, i.e. potentially Five Hundred Thousand ($500,000.00) Dollars. Because he did not purchase this coverage, it is highly unlikely that we will receive any money whatsoever for his pain and suffering damages from the drunk driver.
I did establish a Michigan No-Fault claim for Richard, so all of his medical bills that arose out of the accident will be paid for and he will receive his lost wages for three years. His life has been permanently interrupted and changed by this accident and he will most likely receive no compensation for his injuries.
Additional resources provided by the author
1 Visit www.michigan.gov/sos
2 MCL 257.31 “Motorcycle” defined.
3 257.32b “Moped” defined. Sec. 32b. “Moped” means a 2- or 3-wheeled vehicle which is equipped with a motor that does not exceed 50 cubic centimeters piston displacement, produces 2.0 brake horsepower or less, and cannot propel the vehicle at a speed greater than 30 miles per hour on a level surface. The power drive system shall not require the operator to shift gears.
2 MCL 257.31 “Motorcycle” defined.
3 257.32b “Moped” defined. Sec. 32b. “Moped” means a 2- or 3-wheeled vehicle which is equipped with a motor that does not exceed 50 cubic centimeters piston displacement, produces 2.0 brake horsepower or less, and cannot propel the vehicle at a speed greater than 30 miles per hour on a level surface. The power drive system shall not require the operator to shift gears.
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