Insurance lawyer answers common questions from bicycle accident victims
Summer is now over, so why am I writing about bike damage in October? Well, to be honest, I’ve been meaning to get to this earlier, but hey, we’re still seeing some bicyclists out and about. So before it gets too cold (and that may well be by tomorrow), I wanted to address two common questions that I get and some of our attorneys receive when someone on a bike is hit by a car. Besides questions on insurance, “Who pays for bicycle repairs and bike damage?” is probably the most common question I get.
- Is “someone” going to pay for the bicycle damage or must the bicyclist pay out-of-pocket?
- If “someone” is going to pay, then who?
Here’s how the law works in Michigan.
The good news: bicyclists do not have to pay out of pocket for bicycle damage.
Bike owners do not have pay out of pocket for bicycle damage
Under Michigan’s No-Fault Law, “property protection insurance” benefits will pay for bicycle damage “arising out of” a Michigan auto accident. (MCL 500.3121(1)) PPI benefits are not available to cover bike damage caused by an out-of-state auto accident. (MCL 500.3123(2))
Moreover, PPI benefits are payable for bicycle damage “without regard to fault.” (MCL 500.3121(2))
That is significant for two reasons:
- The bicyclist doesn’t need to prove fault or negligence on the part of the motorist.
- Fault on the bicyclist’s part does not disqualify him from collecting PPI benefits to pay for his or her bicycle damage.
The type of bicycle damage that is covered by PPI benefits includes “physical injury,” “destruction,” and/or “loss of use” of the injured or destroyed bicycle. (MCL 500.3121(3))
No-Fault insurance company pays
Under Michigan’s No-Fault Law, “an insurer is liable to pay” PPI benefits to compensate for a bicyclist’s accident-related bicycle damage. (MCL 500.3121(1))
Here is how a bicyclist will identify the “insurer [who] is liable to pay”:
- The No-Fault provides that a “person suffering accidental property damage claim property protection insurance benefits from insurers in the following order of priority …”
- Initially, a bicyclist should file his or her PPI claim with the “insurers of owners or registrants of [the] vehicles involved in the accident …” (MCL 500.3125)
- And, if that does not work, i.e., the owners or registrants cannot be identified or they are uninsured, then the bicyclist should file his or her PPI claim with the “insurers of [the] operators of [the] vehicles involved in the accident.” (MCL 500.3125)
The PPI benefits that a bicyclist may recover for bicycle damage “consist of the lesser of reasonable repair costs or replacement costs less depreciation and, if applicable, the value of loss of use.” (MCL 500.3121(5))
Notably, for damage “arising from 1 accident,” PPI benefits “shall not exceed $1,000,000.00.” (MCL 500.3121(5))
Time is of the essence when it comes to bringing a PPI claim to cover auto accident-related bicycle damage.
Under the No-Fault Law, an “action for recovery of property protection insurance benefits shall not be commenced later than 1 year after the accident.” (MCL 500.3145(2))
Significantly, a PPI lawsuit to recover for auto accident-related bicycle damage must be filed against the “insurer [who] is liable to pay,” not the owners, registrants or operators of the “vehicles involved in the accident.”
Out-of-state bicycle accidents
Although PPI benefits are not available to cover bike damage caused by an out-of-state auto accident (MCL 500.3123(2)), a bicyclist may be able to recover through the property damage coverage carried by one of the owners, registrants or operators of the vehicle involved in the accident, assuming they are driving a vehicle covered by a Michigan auto insurance policy.
Under Michigan’s Insurance Code, every Michigan auto insurance policy must include “liability coverage” with “a limit of not less than $10,000 because of injury to or destruction of property of others in any accident.” (MCL 500.3009(1))