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A Better Partnership
March 29, 2012

COA Opinion: Insurer of previous owner of motorcycle was required to pay insurance benefits when previous owner failed to cancel his registration.

Titan Insurance Co v. State Farm Mutual Automobile Insurance illustrates why it is important to diligently cancel a car or motorcycle registration after selling the vehicle. The Michigan Court of Appeals was confronted with the question of which insurance company should pay personal injury protection benefits arising out of an accident between a motorcycle and an automobile when neither operator was covered by an applicable no-fault insurance policy. Michigan's Insurance Code sets the order of priority from which an injured person may claim benefits from the various insurers involved. Under this statute, one of the insurers that an injured person may seek benefits from is the insurer of the 'owner or registrant of the motorcycle involved in the accident.' In this case, the motorcycle had been sold a few days before the accident, but the previous owner remained the registrant of the motorcycle because he failed to cancel his registration and allowed his license plate to remain on the motorcycle. Accordingly, the previous owner's insurance company was required to pay the benefits to the injured person.

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