Recreational Vehicle Liability

On May 1st 2018 the city of Richmond will be joining several other communities in the state of Michigan that will allow golf carts to be used on public streets. For the last couple of years the State of Michigan has allowed communities with less than 30,000 people to pass an ordinance that allows golf carts to be on public streets provided that the street has a speed limit of 30 miles an hour or less.

In order to register your golf cart with the city of Richmond,you will need to provide them a certificate showing that you have liability insurance. So which one of your insurance policies will this liability coverage come from? In most cases it will come from your homeowners policy.

When you are up late at night and can’t sleep, I would recommend reading your homeowners policy.  You will find it mentions liability for golf carts and or recreational vehicles in a few different areas. While each company’s policies may vary slightly,  the vast majority of them will exclude liability from a golf cart or a recreational vehicle while not on the insured’s property.

In other words if you are driving a golf cart, a four wheeler or a snowmobile on property that you own and someone is injured, your homeowner’s policy will in fact provide liability coverage. But the moment that you cross the property line and enter property that you do not own the liability coverage ceases.  

There are options with most companies to add this coverage so liability will follow you wherever you zip around on your golf cart. The cost could range anywhere from $25 to $95 per year depending on the company you are insured with.

If you own a golf cart or a different type of recreational vehicle, it is important to add this liability to your policy regardless if the city of Richmond or any other municipality is requiring it. As an Insurance Professional,  I usually rely on some worst-case scenarios to explain why a certain coverage is important. After all insurance is most important during the worst times of your life. By adding this extra liability coverage, we are protecting you in the event that you are sued and found liable for bodily injury to another person or property damage. So let’s look at a couple of examples.

Your son or daughter has a few friends over in the winter time. They decide to fire up the snowmobile and hook a sled to the back.  They then take turns pulling each other around. After three or four laps around your tiny boring yard they noticee that the neighbor’s yard has a great big area with fresh powder. They decide to take a loop around the neighbor’s yard. Unfortunately they forgot that your neighbor has a great big rock that is covered up with all that fresh powder. As they turn the corner the sled speeds up and hits the Rock. The occupant of the sled, your son’s friend, hits his head on the rock and suffers a severe concussion. He is taken to the hospital and has several tests and unfortunately has to have surgery. A few months later you receive a letter from an attorney asking you to provide your homeowners insurance information. Because the incident took place off of your property if you do not have this extra endorsement on your homeowners policy, instead of your homeowners insurance company hiring an attorney and defending you in the lawsuit and ultimately paying if you are found liable, you would be hiring your own attorney and paying for it out of your own pocket. I can guarantee that it will cost more then it would have if you would have added the endorsement.

Another scenario that could happen while your son or daughter are riding on the neighbor’s property is they could hit the neighbors well head with the snowmobile. The cost to repair the well would be covered under the property damage of your policy if it is properly endorsed with the recreational liability coverage.

Now let’s talk about golf carts city streets. What could go wrong? Unfortunately I see several things that could go wrong but that may be the topic of another blog…   The most obvious thing that could go wrong is an incident where a vehicle in a golf cart collide. In this situation depending at who is at fault in the accident the golf cart owner may have a liability exposure. Just like in a car on car accident, the police will investigate and assign blame. If the golf cart owner is found at fault and there is a serious injury involved, once again the letter will arrive asking you to provide info on your homeowners policy.

What about injuries for you or your passenger while riding on the golf cart?   If the injuries are sustained because of an accident with a vehicle, the injured party will be provided PIP coverage from and auto policy. The coverage will follow the same order of priority that is in place for any auto accident. The order of priority is as follows:

• First priority – No-fault insurer of injured occupant

• Second priority – No-fault insurer of injured occupant’s spouse

• Third priority – No-fault insurer of resident relative of injured occupant

• Fourth-priority – No-fault insurer of owner or registrant of the vehicle occupied at the time of the accident

• Fifth priority – No-fault insurer of the operator of the vehicle occupied at the time of the accident

• Sixth Priority – Michigan Assigned Claims Facility

The main point  is the only way the auto insurance no fault PIP coverage will kick in is if there is a vehicle involved. if your passenger just falls out of the golf cart and is injured but no vehicle is involved he or she will have to utilize their personal health insurance coverage or hire an attorney to pursue a lawsuit against the owner of the golf cart.

If you own a golf cart or recreational vehicle please give our office a call so we can make sure you have the appropriate coverage for when that vehicle leaves your property.