Court addresses who pays PIP benefits when biker struck by car involved in police chase
In a Kalamazoo County case, State Farm Mutual v. Michigan Municipal Risk, et al., the trial judge rejected all of the insurers' motions for summary disposition in a fight over paying PIP benefits to an injured man. That man, Martin Bongers, was hurt when a vehicle eluding police ran a red light and struck him on his motorcycle. Bongers' car was insured with State Farm, but not the bike. The vehicle fleeing police was insured by QBE, but QBE argued that it should be entitled to void its policy because there was a falsehood on the application for insurance. The insurer of the police car chasing the at-fault vehicle argued that the police car was "not involved" in the collision, and therefore it did not owe benefits.
The Court of Appeals first noted that State Farm should have been granted summary disposition because it was conclusively established that the police vehicle was immediately behind and chasing the car that ran the red light, and therefore "involved" in the incident. The Court then recognized that the priority provisions of the No Fault Act made one or both of the car insurers responsible for the motorcyclist's PIP benefits.
With regard to QBE's argument that it could invalidate its coverage because of the owner's false representations in purchasing coverage, the Court noted that since PIP benefits are a statutory obligation, the recent decision by Michigan's Supreme Court allowing the insurer to void policy benefits due to an innocent party did not apply. The recent case changing the law and allowing an insurer to invalidate a policy after a collision had injured an innocent person applied only to a policy providing contractual benefits; it did not apply to the payment of statutorily-mandated PIP benefits.