Republicans stun the entire bar and insurance industry with ruling on replacement services
The insurance industry received an unexpected gift this month when the Republican majority of the State Supreme Court changed the interpretation of recoverable damages a family can collect after a serious car accident. Details can be found in Penny Jo Johnson v. John Recca. Since 1974, Michigan's no fault law has divided an injured person's rights into two mutually exclusive parts: you buy your own medical coverage, up to three years of wage loss (to a monthly maximum), and up three years of allowable expenses or household domestic services (up to a daily maximum of $20.00 per day).
The injured party cannot sue the at fault driver for these PIP [personal injury protection] benefits or "damages," however, if the victim can show fault and if he or she has suffered "death, permanent serious disfigurement, or a serious impairment of bodily function" he or she can collect these "PIP" benefits "in excess of the daily, monthly and three year limits" from the at-fault driver.
This system worked just fine from 1974 until this month, and in fact Justices Young and Markman described it with approval as recently as 2004. Nevertheless, when the Legislature decided to allow persons over 60 to opt out of wage loss coverage, they changed the paragraph structure of the operative statute, and this month the Republicans read that change to eliminate the recovery of "excess" household domestic services entirely.
What does it matter? If a mother of three is killed in a motor vehicle accident by a drunk or a sleeping semi-truck driver, the "old" law [1974-2012] allowed her family to collect the expenses associated with hiring a person to provide the household services to the family that she had been providing. [Of course the same is true with respect to a terribly injured or deceased "house-husband," however, studies confirm that statistically it is far more likely that the majority of a household's domestic duties will fall on the woman.] In any event, the family's insurer must pay only $20.00 per day, maximum, for three years at the longest: the at-fault's insurer had to make up the difference. Now, the family is just "out of luck:" they receive nothing for child care, laundry, meal preparation, housecleaning, snow shoveling, etc., beyond the first three years or in excess of $20.00 per day.
The dissenting Justices pointed out the "absurdity" of this decision, given that the operative statute expressly preserves "allowable expenses...in excess of the daily limits" and replacement service expenses ARE THE ONLY EXPENSE SUBJECT TO DAILY LIMITS.