Michigan’s no-fault insurance benefits, especially Personal Injury Protection (PIP) benefits, are among the most favorable to claimants. Michigan law requires no-fault insurance for every vehicle owner. This insurance pays for medical expenses, wage loss benefits, replacement services, and damages to other people’s property, no matter who caused the accident. These provisions make Michigan’s no-fault coverage attractive to injured claimants when insurance coverage may not otherwise be available or fault may be difficult to establish, as shown by a recent case decided by Michigan Court of Appeals in which the court awarded PIP benefits to an uninsured, out-of-state claimant. Mary Free Bed Rehab. Hosp., et al. v. Farmers Ins. Group of Companies, et al.
, 2015 Mich. App. LEXIS 2440 (December 22, 2015).
In March 2012 Yu Ju Chen became paralyzed after a car accident while she was a passenger in a rental car driven by her boyfriend Jason Liao. The accident occurred in Michigan, while the couple was driving to Ontario, Canada. Chen and Liao were Illinois residents, and the rental car was registered in Nebraska. Chen did not have any insurance of her own. Liao was insured by Farmers under a policy issued to his parents in Illinois. Chen sought PIP benefits under Michigan’s No-Fault law from Liao’s parents’ Farmers policy. The court held that Chen was entitled to these benefits under Michigan law.
MCL 500.3113(c) provides for an exclusion from PIP benefits if three conditions are met: (1) the claimant was not a resident of Michigan; (2) the claimant was an occupant in a vehicle that was not registered in Michigan; and (3) the claimant was not insured by an insurer that has filed a 3163 certification. The first two conditions were satisfied in this case. Although Farmers filed a 3163 certification to transact insurance business in Michigan, it argued that Chen was not its insured and therefore not entitled to PIP benefits. The court disagreed.
Filing a 3163 certification avails insurers of Michigan’s no-fault system. Prior Michigan case law has found that Michigan’s no-fault law does not limit an insurer’s liability to situations in which its insured is injured. If a 3163 certificate is filed, Michigan’s no-fault coverage also exists for claimant injured in an accident arising from an insured’s operation of a vehicle. The entire Michigan PIP scheme is implicated when any accidental injury occurs due to an insured’s ownership or use of a motor vehicle. Liao was insured under the Farmer’s policy. Therefore, Chen could receive the policy’s PIP benefits.
As a result, benefits under Michigan’s PIP scheme were available to Chen even though the only connection to Michigan was that it was the location of the accident in which she was injured.