Insurer cannot block Uninsured Motorist Claim by reliance on "do nothing" provision in policy
Progressive Michigan Insurance, as with many insurers, includes in its Under- and Uninsured Motorist Provisions a clause requiring the insured to "do nothing that would prejudice the insurer's right to recover its payment from the at-fault." Joseph Sims was hurt by an uninsured driver and attempted to collect compensation under his UM policy with Progressive. Progressive argued that because Sims had not joined the "John Doe" uninsured in his lawsuit prior to the statute of limitations running, he had violated the "do nothing" clause and could not collect UM benefits from it. The trial court accepted this argument.
The Court of Appeals reversed the trial court's decision. It noted that an unambiguous statement in an insurance policy cannot be "interpreted" and the plain meaning of the clause at issue was not open to interpretation: it could not be re-interpreted to mean, as Progressive argued, that Sims was obligated to "do everything" possible to preserve Progressive's claim: the insured's obligation was stated clearly: he was prohibited from affirmatively acting to the insuerer's detriment. The Court noted that the insurer attempted to prevent Sims from joining the uninsured motorist in the lawsuit--clearly demonstrating that it preferred an argument of prejudice to compliance with the policy. In the end, Progressive enjoyed the opportunity of acting during the statute of limitations period to protect its own interests, and it failed to do so. It cannot hold this failure against the insured under the plain language of the policy.