Background
A minor, IL, suffered life-threatening injuries when a vehicle struck her as she crossed a street in October 2022. Detroit Medical Center treated her and later sought reimbursement for its services. IL lived with her mother, grandmother Audrey Lusby, and another minor relative. Audrey held a Farm Bureau no-fault policy but had selected an option declining personal protection insurance medical coverage.
Audrey certified that she had Medicare Parts A and B and that her resident relatives had qualified health coverage or coverage under another auto policy, but she listed only herself on the verification form. The evidence showed that IL and another resident minor had Medicaid, while IL and her mother had no other applicable no-fault policy. The trial court found Audrey’s opt-out effective as to herself, granted summary disposition to Farm Bureau, and ruled that IL could pursue benefits through the Michigan Assigned Claims Plan. The Michigan Automobile Insurance Placement Facility appealed by leave granted.
The Court’s Holding
The Court of Appeals held that Audrey did not make an effective election to opt out of PIP medical coverage under MCL 500.3107d. Although she was a qualified person with Medicare Parts A and B and used an approved election form, the statute also required her resident relatives to have qualified health coverage or PIP medical coverage under another auto policy. Medicaid does not satisfy the statutory definition of qualified health coverage, and Audrey also failed to provide proof of qualifying coverage for every resident relative.
Following Northland Radiology, Inc. v. Allstate Fire & Casualty Insurance Co., the court concluded that failure to satisfy every statutory opt-out requirement rendered the election ineffective for the entire policy. Under MCL 500.3107d(4) and MCL 500.3107c(1)(d), the Farm Bureau policy therefore provided unlimited PIP medical coverage to Audrey’s resident relatives, including IL. The court reversed the order granting Farm Bureau summary disposition and denying MAIPF summary disposition, then remanded for further proceedings.
Key Takeaways
- A named insured cannot effectively opt out of PIP medical coverage unless every statutory condition in MCL 500.3107d is satisfied.
- Medicaid is not “qualified health coverage” under the statutory definition governing a PIP medical opt-out.
- An ineffective opt-out causes the policy to provide unlimited PIP medical coverage, including to resident relatives who could claim benefits under the policy.
Why It Matters
The decision confirms that Michigan’s PIP opt-out requirements apply to the insured’s household as a whole, not merely to the named insured individually. Insurers and coverage litigants must examine the actual coverage of every resident relative and the supporting documentation rather than rely solely on the insured’s certification.
For providers and assigned-claims participants, the ruling also clarifies priority: when a purported opt-out is ineffective, the resulting unlimited coverage under the household policy may place responsibility on the no-fault insurer rather than the Michigan Assigned Claims Plan.