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Insurer sues to "double-dip" Catastrophic claim fund; loses

Old Republic Insurance Company is registered to sell no fault insurance in Michigan.  It is, therefore, obligated to contribute to the catastrophic claims fund (MCCA) and entitled to reimbursement for PIP payments in excess of $300,000.00.  It insured a truck owned by Pepsi Cola under a self-insurance agreement that included, in essence, a $500,000.00 "deductible."  The truck was involved in a collision with a motorcyclist, causing the biker more than a half-million dollars in medical expense.  Even though it had spent nothing, because of Pepsi's deductible, the insurer sued the MCCA for "reimbursement" of the medical expense "incurred" by the cyclist. 

The Court held that this claim was nonsense and that if the insurer were actually paid by the MCCA, it would owe that money back to the MCCA by reason of a third-party's (Pepsi's) payment.  The Court held that it would not compel the MCCA to pay a bill under circumstances where the payee was obligated to immediately tender reimbursement.

Thompson O’Neil, P.C.
309 East Front Street
Traverse City, Michigan 49684
Toll Free: 1-800-678-1307
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