Michigan Supreme Court's Republican majority re-defines when no fault benefits are payable
As part of their aggressive August push to grant favors to the insurance industry, the four Republicans on Michigan's Supreme Court re-defined when no fault medical benefits are payable. It acted on behalf of Farm Bureau to deny Spectrum Health Hospital's claim for repayment for extensive medical services, even though the involved Farm Bureau-insured vehicle was driven by Craig Smith who did not "unlawfully take" the subject car.
Spectrum provided extensive care to the occupant of a vehicle that had been taken by Craig Smith without his family member's permission. The Michigan No Fault statute grants coverage to any occupant (and his care providers) who is occupying an insured vehicle, unless the vehicle was "taken unlawfully." Historically, the Michigan courts have universally applied the "chain of permission" rationale, to hold owners responsible for an insured vehicle--even if a permissive user in the chain exceeds his authority.
Under existing legal precedent including a case involving Progressive Insurance and a second case brought by a man named Priesman, the Michigan Courts had made it clear that No Fault PIP benefits were payable to an occupant of an insured car, even if a family member drove the car without his relative's express consent. It was considered to be established law that "taken unlawfully" applied only to criminal car theft--not to cases of intra-family lack of consent. These precedential cases had relied, in part, on the Uniform Motor Vehicle Accident Reparations Act (UMVARA) interpretation of when an insurer should be able to deny benefits.
On behalf of Farm Bureau Mutual Insurance Company, the Republicans overturned this existing precedent and denied no fault PIP coverage to both the occupant and to the medical care providers (who likely provided care in part in reliance on the existing case precedents). The dissenting Democratic appointees to the Court pointed out that Judge Hoekstra of the Court of Appeals was accurate when he explained that the exclusionary languge in the statute was intended to deny benefits to "thieves while driving stolen vehicles"---not to family members who exceeded their relative's permissive use.