Michigan Supreme Court limits costs claimed under no-fault car insurance

March 27, 2014 (Press-News.org) Michigan Supreme Court limits costs claimed under no-fault car insurance

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Recently the Michigan Supreme Court issued an important ruling involving no-fault auto insurance. In the case of a man catastrophically injured in a motorcycle accident, the court decided that the insurer is responsible for paying for the necessary modifications to a van but not for the van itself.

In the interests of limiting the costs of no-fault insurance, the state Supreme Court ruled that only expenses directly related to a claimant's injuries should be covered. The court determined that, in this situation, the need for a motor vehicle for transportation was not directly related to the man's injuries. Only the modifications necessary to allow him to get into and out of the van while occupying a wheelchair were considered to be directly related to his injuries.

Catastrophically injured man allowed to claim cost of vehicle modifications but not base cost of van

The case of Admire v. Auto-Owners Insurance Company involves a motorcycle driver who was catastrophically injured when his vehicle collided with a car in 1987. Consequently, he requires a vehicle accessible to a person occupying a wheelchair. According to an article on the case in the State Bar of Michigan's "Journal of Insurance and Indemnity Law," the relevant insurance company (the insurer of the other vehicle in the collision) paid the full cost of modified vans in 1988, 1994, and 2000.

However, when the company was approached again in 2006 to provide a replacement van, it refused to pay the full cost. Instead, the insurer offered to pay only for modifications to a van. The man proceeded to acquire and modify a van under these conditions and "was left with out-of-pocket expenses totaling $18,388.50." Next he filed a lawsuit against the insurance company, seeking a reimbursement of this amount.

The trial court and the appeals court agreed that the injured man should be reimbursed, but the Supreme Court disagreed. The top court stated in its case judgment that "the base price of the van is an ordinary transportation expense." Accordingly, the Supreme Court ruled that the insurer had properly limited its benefit payments to an amount related to the modifications to the van.

Michigan legislators consider placing limits on no-fault insurance benefits

A story on Michigan Radio places this Supreme Court ruling in the context of a broader debate in Michigan about no-fault insurance benefits. According to the story, some politicians "want to cap medical and assisted living benefits" through changes to Michigan's no-fault insurance law.

Anyone whose insurance claim related to injuries sustained in a motor vehicle accident has been denied should contact an experienced Michigan personal injury lawyer. As this Supreme Court ruling demonstrates, the state jurisprudence in this area is evolving. An attorney with relevant expertise will provide timely advice on available legal options and, where required, will offer vigorous representation.