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GEICO wins appeal; avoids paying Survivors Benefits because parents bought policy

Richard and Debra Mays bought insurance from their insurer, GEICO, on the car driven by their daughter.  They explained the car would be garaged at the daughter's address. It was titled in the name of a friend of the daughter's.  When the daughter was killed in a car accident, the family sought survivor's benefits for her dependents.  GEICO refused to pay, arguing that since the Mays were not the titled owners of the vehicle, they were not required to insure it under Michigan law and GEICO wasn't obligated to pay the contracted-for benefits.

Incredibly, the judges held that since the Mays were required to buy insurance under state law, they weren't entitled to recover the benefits they purchased, even though they did, IN FACT, buy insurance from GEICO.  And the court reached this result even though there was no argument that the Mays had misrepresented the purchase, ownership or operation of the car.  The insurance company was glad to take their premiums, but equally eager to invalidate the coverage once there was a claim that it owed the woman's children PIP benefits.


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