You bought good insurance--but the fine print takes it away from your family
Following the mandate established by the activist Engler Supreme Court to enforce even the unexpected fine print in an insurance contract, the Court of Appeals overturned a decision by a Grand Traverse County Judge and reduced the insurance limits on the Plaintiff's policy from $300,000.00 dollars per person to $20,000.00. The insurer had added a provision to its policy, years after selling it to the Ruzak family, which reduced their liability coverage if the injured person was a family member. The judge who heard the case acknowledged that it had been written into the contract, but described it as "repugnant" and contrary to public policy.
In Ruzak v. USAA, the Appeals Court panel overturned the ruling for the insured and returned the case so that the local judge could examine Plaintiff's claim that they were never advised of the change in family-member liability coverage. They had originally purchased their auto insurance policy from USAA in the 1960s, and USAA acknowledged that this reduction in paid benefits was not contained in the original policy.
The case arose after Mr. Ruzak lost control of his truck and struck a tree. His wife, a passenger in the truck, was severely injured. She had a legitimate legal claim against Ruzak, however, the insurance policy had been amended, apparently in 1999, to reduce the insurer's obligation to any family member of the insured to the statutory minimum (1974's $20,000.00) rather than the paid-for level of coverage. As a result of the decision, the fine print in the contract will not provide the Ruzak family with the injury and liability coverage that they originally purchased and continued to pay for. They claim they were never aware of this reduction in "family member" coverage and would have changed insurers if they had realized it was in their contract.
Sadly, with the Republican activists' decision to enforce all of the fine print in insurance contracts--even if the fine print contradicts an insured's "reasonable expectations"--disappointments suffered by people like the Ruzaks have become common in Michigan law. On the bright side, as you can see in other blog entries on this site, auto insurers in Michigan are taking home record profits. The message is "Don't buy insurance: buy insurance stocks." And don't get hurt.