Court holds that GEICO insurance policy contradicts no fault act and refuses to recognize exclusion
This was a case of two insurers arguing priority, or it might have come out differently. After all, when two insurers fight, one of them must lose...even in Michigan. Even with Judge Henry Saad involved.
Wyvonne Spencer was very badly hurt in a car wreck while operating her husband's truck. The truck was insured with the Hartford Company, while Wyvonne's car was insured with GEICO. Under the no fault statute, GEICO was obligated to pay Wyvonne's No Fault PIP benefits (basically some wages, medical and some services) because it insured Wyvonne as a "Named Insured," and she wasn't a Named Insured on the truck policy. GEICO refused, however, arguing that it had excluded coverage for any injuries suffered while occupying, or if struck by, a vehicle not insured by GEICO.
As the Court noted, this is essentially a priority dispute and the No Fault statute dictates how priority disputes must be resolved. In Michigan, insurance follows the purchaser--not the insured car--meaning that GEICO's attempt to avoid coverage in this case was a direct contradiction of the statutory priority rules. It should have paid Spencer without litigation being necessary.
Despite the clear violation of law by GEICO, there is no indication in the opinion that costs for the appeal were taxed to GEICO.