May 03, 2012
In an unpublished opinion, the Michigan Court of Appeals has held that the insurer of an automobile may limit the extent of its coverage toward certain individuals under its policy. In Kammers v Pioneer State, decided April 19, 2012 (docket number 303726), the Court was faced with a priority dispute between two insurers arising out of an auto accident which injured Janice Kammers.
Kammers was a passenger in a vehicle which was struck by an auto driven by Tammy Sue Long, who had borrowed that vehicle from her in-laws, Robert and Ethel Long. At the time of the accident, Robert and Ethel Long had a policy with Pioneer which provided residual liability coverage up to $300,000. Tammy Sue Long’s policy with State Farm provided excess coverage in the amount of $50,000.
Pioneer’s policy provided residual liability coverage for the named insureds, or for any “family member” as defined under the policy, when using a covered auto. However, if anyone other than a named insured or “family member” had been using the covered auto, the policy limited the amount of available coverage to $20,000, which is the minimum amount required under Michigan’s Financial Responsibility Act, MCLA 257.520(2).
The language of the “step-down” provision from Pioneer’s policy read as follows:
Notwithstanding the coverage limits shown in the declarations page of this Insuring Agreement, any insurance for “bodily injury” under this coverage section with respect to “your covered auto” or “trailer” provided to any person or organization other than you or any “family member” using “your covered auto” or “trailer” is limited to the minimum limits of liability specified in the Financial Responsibility Law of the jurisdiction of the State or Provence in which the “auto accident” occurs.
It was undisputed that Tammy Sue Long was not a “family member” as that term was defined in Pioneer’s policy, because she did not reside with her in-laws. It was also undisputed that Pioneer’s policy was the first in priority for the payment of residual liability coverage in that case.
However, Pioneer argued, and the Court of Appeals agreed, that Pioneer’s coverage with respect to Tammy was limited to $20,000, based upon the step-down provision. While the insurer of an automobile involved in an accident may not shift priority of all coverage to the driver of that auto by completely excluding coverage for a non-owner driver, the Court held that the insurer may limit the extent of its coverage towards certain individuals, as Pioneer’s policy did in this case.
The “step-down” restriction in this case was held to be valid because it provided the statutory minimum amount of coverage and did not attempt to completely exclude all coverage. For these reasons, the provision in Pioneer’s policy limiting coverage to $20,000 with respect to drivers who were non-family members of the named-insureds was held to be valid and enforceable.
***************************
GARAN LUCOW MILLER
COMPLIMENTARY SEMINARS
REGISTER NOW!!!
Indy City Seminar
JW Marriott, Indianapolis
Wednesday, May 23, 2012
8:30 a.m. – 1:00 p.m.
To register contact: ecarty@garanlucow.com
INDY CITY SEMINAR – CONTINUING EDUCATION CREDIT
Garan Lucow Miller, P.C. is pleased to announce that the Indy City Seminar has been approved for 3 credit hours of continuing education credit from the IN Dept of Insurance.
Drawing to win 4 tickets to the Indy 500!
*******************************
REGISTER NOW!!!
Trial Boot Camp Seminar
Marriott, Troy, MI
Thursday, May 31, 2012
8:30 a.m. – 3:30 p.m.
To register contact: ecarty@garanlucow.com
*******************************
UPCOMING SEMINAR
Troy Breakfast Seminar
Marriott, Troy, MI
Thursday, August 16, 2012
8:30 a.m. – 12:30 p.m.
To register contact: ecarty@garanlucow.com
**************************
GARAN LUCOW MILLER
INDY CITY SEMINAR
Garan Lucow Miller, P.C. is pleased to present a half day seminar covering both Indiana and Michigan Law on May 23, 2012, at the JW Marriott, located at 10 S. West Street, in downtown Indianapolis (317) 860-5800. Comprehensive written materials will be distributed to all seminar attendees.
8:30 – 8:55 Continental Breakfast – Registration
8:55 – 9:00 Welcome and Introductions
David N. Campos
9:00 – 9:30 Michigan First-Party No-Fault (PIP) Update
Speaker: David N. Campos
9:30 – 9:55 Indiana First-Party Law Update
Speaker: Gregory M. Bokota
9:55 – 10:15 Intellectual Property
Speaker: Robert D. Goldstein
10:15 – 10:25 Break
10:25 – 10:45 Michigan Premises Liability Update
Speaker: L. Ladd Culbertson
10:45 – 11:10 Michigan Third-Party Automobile Negligence Update
Speaker: L. Ladd Culbertson
11:10 – 11:35 Indiana Third-Party Law Update
Speaker: Gregory M. Bokota
11:35 – 12:00 Case Evaluation and Facilitation
Speaker: Robert D. Goldstein
12:00 – 12:45 Accident Reconstruction and “The Little Black Box”
James Hrycay – Hrycay Consulting Engineers
12:45 – 1:00 Questions and Answer Session
COURSE APPROVED FOR 3 CREDIT HOURS OF CONTINUING EDUCATION BY THE INDIANA DEPARTMENT OF INSURANCE!
If you are able to attend this complimentary event, please register via e-mail to Eileen Carty at: ecarty@garanlucow.com
We hope to see you there!
****************************
GARAN LUCOW MILLER
TRIAL BOOT CAMP SEMINAR
Garan Lucow Miller, P.C. is pleased to present a full day seminar covering trial preparation and featuring a mock bench trial, on May 31, 2012, at the Troy Marriott, located at 200 West Big Beaver, Troy, MI 48084 (800) 228-9290. Comprehensive written materials will be distributed to all seminar attendees.
8:30 – 9:00 a.m. Continental Breakfast – Registration
9:00 – 9:30 a.m. Welcome and Introductions
John W. Whitman
9:30 – 10:30 a.m. Overview of PIP File
Speaker: John W. Whitman
10:30 – 12:00 p.m. Break Out Sessions-Sub Groups: Assigned to attorney for trial preparation
Speakers: William J. Brickley
Judith A. Moskus
Timothy E. O’Neill
John W. Whitman
12:00 – 1:00 p.m. Lunch-(on your own)
1:00 – 2:30 p.m. Mock Bench Trial with Direct and Cross Examination
2:30 – 3:30 p.m. Question and Answer Session
If you are able to attend this complimentary event, please register via e-mail to Eileen Carty at: ecarty@garanlucow.com
We hope to see you there!