Auto Owners subsidiary loses second fight attempting to avoid PIP obligation
A young visitor to Bay City from Pennsylvania was injured when she was struck by a car. Her father, a Michigan resident, was insured with Auto Owners' subsidiary Home Owners, but Auto Owners refused to pay her medical. Farm Bureau, the insurer of the car that struck her, paid the medical and obtained a judgment of $62,000.00 against Home Owners. Home Owners then sued Allstate, which insured the child's grand-parents in Pennsylvania (with whom the child and her mother lived), arguing that it should be liable for PIP benefits.
The trial judge misunderstood and mis-applied the No Fault statute and entered judgment in favor of Home Owners and against Allstate. Allstate appealed, arguing that Home Owners could not recoup its payments from Allstate because the Allstate-insured vehicle was not involved in the incident that resulted in the child's injuries. The Court of Appeals unanimously agreed that even though Allstate was certified to sell insurance in Michigan and could be required to pay PIP benefits in an appropriate case, the insured Pennsylvania vehicle would need to be operated in Michigan and involved in the incident to make Allstate the highest-priority insurer. Auto Owners' aggressive, repeated effort to shed its PIP obligation was rejected.