State Farm loses priority battle; must pay PIP benefits as vehicle "involved" in motorcycle accident
Chad Theodore dumped his bike when Krysta Livingston made an abrupt stop to avoid a swerving car from the other lane. Under the No Fault act, the insurer of any motor vehicle involved in the incident was to be the first priority insurer required to pay Theodore's PIP benefits (i.e., all medical and some wages and services). State Farm insured Livingston and Progressive insured Theodore, and they disagreed over who was first priority to pay.
Confusing "involvement" with "fault," State Farm argued that under Livingston's description of the incident, while she did brake hard, she wasn't a causative agent "involved" in Theodore's injuries. The Court of Appeals rejected this argument and upheld the lower court's judgment. In enacting the no fault law in the 1970s, the Michigan Legislature found that motorcyclists are often seriously injured, but rarely at fault when a car or truck is involved in an incident. To make bike insurance more affordable, the Legislature simply required "involved" car insurers to take priority in paying basic PIP benefits, regardless of proof of "fault."