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State Farm can't invalidate policy because comatose insured didn't report accident

William DeFrain was struck by a hit-and-run driver and was comatose through the 30-day period during which his State Farm auto policy required him to report any  accident involving a hit-and-run driver.  He died a few months later from complications resulting from the accident.  When his mother attempted to claim the Uninsured Motorist Coverage he had purchased from State Farm, it  refused to pay, citing the contract provision that required him to give them notice of the accident within 30 days.

State Farm did not deny that it was aware of  DeFrain's injuries and accident, and it did not claim prejudice, but it cited a recent decision by the Michigan Supreme Court (Engler majority) that allows an insurer to enforce any time deadline it writes into a contract for non-mandatory coverage--regardless of reasonableness or prejudice.

The Court of Appeals refused to apply the latter holding, and rejected State Farm's argument.  The Court held that the recent undeveloped Order entered by the court conflicts with a fully reasoned opinion of the Court in another, prior case, where the Supreme Court firmly established the principle that short notice period "conditions precedent" to collecting benefits would be enforced only with a showing of actual prejudice. 

All makes sense and the ruling is a good one, but who knows whether it will stand when State Farm appeals to the Supreme Court with its current Republican majority?  What a state of affairs:   you are struck by a car, brain-damaged and comatose, and the insurer argues that your failure to give notice within 30 days invalidates the coverage you purchased.   And the insurer may have Supreme Court validation for this position!

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