You’re Out: No-Fault Policies Can Properly Exclude Drivers Even When Benefits Are Mandated By Statute

Bronson Health Care Group Inc v State Auto Property and Casualty Insurance Company and State Automobile Mutual Insurance Company, ___ Mich App ___; ___ NW2d ___ (2019) (Docket No. 345332), a published Court of Appeals decision, stands for the proposition that when dealing with mandated coverage, such as PIP benefits, it is the No-Fault Act that governs the coverage, not the policy of insurance. The case also stands for the proposition that if the driver of the motor vehicle was properly named as an excluded operator under MCL 500.3009(2), then he or she is statutorily barred from receiving PIP benefits by MCL 500.3113(d).

The important takeaways from this case are as follows: (1) PIP benefits are mandated by the No-Fault Act, and a claimant’s entitlement to PIP benefits is therefore based in statute, not in contract; (2) even though PIP benefits are mandated by statute, the No-Fault Act provides a mechanism by which a person may be statutorily excluded from entitlement to PIP benefits notwithstanding that he or she may otherwise have been entitled to them; and (3) if a person qualifies as a validly-excluded-driver under MCL 500.3009(2) then pursuant to MCL 500.3113(d), the excluded driver is not entitled to PIP benefits.

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