Background
Chimere Cheryl Cooks was injured while driving a vehicle owned by her sister, April Clay, with whom she lived. Clay’s vehicle was insured by Progressive Insurance Company. Cooks sought personal protection insurance benefits as a resident relative, but Progressive requested additional information because the address on the policy was incorrect and later allegedly denied the claim for noncooperation, order of priority, and Cooks’s failure to live at the policy address.
Cooks then applied for benefits through the Michigan Assigned Claims Plan, which assigned her claim to Citizens Insurance Company of the Midwest. Citizens denied benefits because Progressive was the higher-priority insurer. Cooks sued Citizens, but the Wayne Circuit Court granted Citizens summary disposition under MCR 2.116(C)(10). Cooks appealed.
The Court’s Holding
The Michigan Court of Appeals affirmed. Under MCL 500.3114(1), a no-fault policy applies to a named insured’s relative who is domiciled in the same household. Citizens produced evidence that Clay had a valid Progressive policy and that Cooks was domiciled with Clay as her resident relative. Cooks admitted that her resident-relative status was uncontested and offered no evidence that Progressive had rescinded the policy.
The court held that Citizens needed to establish only that higher-priority insurance was applicable, not that Progressive had accepted Cooks’s claim or actually paid benefits. Even assuming the transcribed voicemail accurately reflected a claim denial, it did not show that the policy had been rescinded or was inapplicable. Because Progressive’s policy applied, Cooks was ineligible for Assigned Claims Plan benefits, and any dispute over Progressive’s handling of the claim had to be pursued against Progressive. The court declined to address Cooks’s alternative argument concerning the timeliness or tolling of claims for chiropractic treatment.
Key Takeaways
- A valid no-fault policy applies under MCL 500.3114(1) to a relative domiciled in the named insured’s household.
- A claim denial does not by itself establish that the underlying policy was rescinded or inapplicable for purposes of Assigned Claims Plan eligibility.
- The Assigned Claims Plan is an insurer-of-last-resort mechanism and is unavailable when higher-priority PIP coverage applies.
Why It Matters
The decision distinguishes between an insurer’s denial of a particular claim and the legal applicability of its policy. A claimant cannot obtain Assigned Claims Plan benefits merely because a higher-priority insurer refuses to pay when the policy remains valid and applies under Michigan’s statutory priority rules.
Claimants disputing a higher-priority insurer’s coverage determination must preserve and pursue claims against that insurer rather than treating the Assigned Claims Plan as an alternative source of benefits.