Jeep is no longer a "motor vehicle" to Republicans interpreting insurance policy
Steven Gividen suffered very severe injuries when the ORV he was riding collided with a Jeep. The Jeep was registered in Texas and insured by Bristol West through Farmers Insurance, two companies that write insurance in Michigan. Bristol West and Farmers refused to pay Gividen's Personal Injury Protection benefits, so Gividen's claim was assigned to the Auto Club through the Assigned Claims Plan. The Auto Club paid more than $500,000.00 in medical on Gividen, apparently, but sued to compel Farmers and Bristol West to re-pay it.
The trial judge ruled that because the Jeep had been modified to use it off highway, it was no longer "operated or designed" for operation on a public highway and was therefore properly considered an excluded "ORV." As a result, the judge concluded, Farmers and Bristol West were not obligated by Michigan law to pay PIP benefits. Nevertheless, the judge ruled that by the language of the Jeep insurance policy, the insurers had promised to pay any benefits that a nonresident was obligated to maintain under the compulsory insurance plan applicable when the insured operated the vehicle in another state. On that basis, he held that the insurers owed reimbursement to the Auto Club for PIP benefits paid.
Bristol West and Farmers appealed and had the good fortune to draw an insurer's "dream panel" of pro-insurance judges: Henry Saad, Kirsten F. Kelly and Judge Wilder. Kelly and Saad are probably the most predictably insurance-oriented, anti-consumer appellate judges in the state.On appeal, not only did the three Republicans affirm the holding that the Jeep wasn't "operated or designed" for operation on the highway, it also yanked the rug on the coverage promised within the insurnance policy. Even though the Texas policy did not define the term "motor vehicle" and promised to comply with coverage requirements of foreign states, the Judges ruled that Gividen--not the other insurers--owed the Auto Club his half-million dollars of medical expense and couldn't recover it from anyone else.
The judges ruled that the Bristol West/Farmers policy language providing coverage for "your covered auto...has no relation to the term 'motor vehicle' as defined in Michigan..." Thus, the "covered auto" Jeep insured in Texas was no longer a "motor vehicle" once it was driven into Michigan--at least insofar as any insurance obligation was concerned. This result was so unexpected that the insurance company did not even raise the argument originally, when coverage was sought. For that matter, the Auto Club paid half a million dollars in PIP benefits before it raised the issue as a defense. Sometimes the Republican judges are even more generous than insurance counsel can predict. The long and the short of the issue is that Republicans made an enormous change in public policy when they ruled that an insurer owes no duty to provide a policy that comports with an insured's reasonable expectations.
Even though the policies contain difficult terms subject to statutory interpretation and sophisticated exclusions--and even though they aren't even provided to insureds until several weeks after the premium is paid--the current Supreme Court Republican majority has ruled that the insurers can enforce any exclusion or strained interpretation that can be incorporated into the policy language. And insureds are bound by those interpretations and exclusions even if a reasonable insured would not have understood them. And the agent who sold the policy owes no duty to explain the terms to the purchaser, barring exceptional circumstances!