Michigan Court Ruling on PIP Coverage: Insurers Must Comply with Law

The Michigan Court of Appeals has ruled that insurers cannot restrict Personal Injury Protection (PIP) coverage solely to vehicles listed in bobtail policies, marking a significant decision against Acceptance Indemnity Insurance Company. The court found this policy language to be in conflict with Michigan law, which mandates that PIP coverage must follow the individual named in the policy, not specific vehicles.

This case involved Termaine Turner, who owned a 2008 Peterbilt tractor for work and held non-trucking liability coverage from Acceptance. Such policies are typically used by truckers for coverage when driving without cargo. Turner sought PIP coverage from Acceptance after a 2021 accident in Las Vegas, where he was driving a friend's vehicle. Despite his previous insurance lapsing due to non-payment, Acceptance denied the claim, asserting the policy covered only the Peterbilt specifically listed.

Initially, a lower court ruled in favor of Acceptance, agreeing that the policy was applicable only to the tractor for non-business use. However, the appeals court reversed this decision, citing Michigan’s no-fault insurance law, which requires PIP coverage to follow the insured individual rather than specific vehicles. The court stressed that statutory requirements override policy language attempting to limit coverage to certain vehicles.

The ruling referenced a 2022 case with Hartford Accident & Indemnity Company, where it was decided insurers cannot bypass legal obligations by restricting coverage to specific vehicles instead of the named insured. This aligns with Turner's case, reinforcing that once PIP is included in a policy, it must adhere to state regulations.

The court further noted Acceptance's reference to an unpublished decision allowing for the denial of PIP claims in similar circumstances. However, it emphasized the precedence of published rulings and distinguished Turner’s case as having no alternative PIP benefits available. Additionally, Acceptance's argument about offering policies excluding mandatory coverages was dismissed, as the policy provided to Turner included PIP, making it unlawful to restrict coverage contrary to state law.

This ruling demands that Acceptance adjust its policy terms to comply with statutory requirements, with further proceedings expected at the trial court level. For insurance carriers providing commercial auto and bobtail policies in Michigan, this decision highlights the necessity of aligning policy language with the legal principle that mandatory PIP coverage should extend to individuals, regardless of the vehicles associated. Insurers may need to reevaluate their policy terms to ensure compliance with state regulations.