Volume XXVII, No. 26, October 2, 2015        

From the Law Offices of Garan Lucow Miller, P.C.

From the Editor: Sarah Nadeau


THE REACH OF MCL 500.3163(4)

By Charles A. Harrison III

In Home Owners Insurance Company v Allstate Insurance Company, (Docket No. 321638, 9/15/15), the Michigan Court of Appeals issued an unpublished decision addressing no-fault coverage for a non-resident pedestrian injured in a Michigan accident.  Marana Czap, a minor who lived in Pennsylvania with her mother and grandparents, was visiting her father in Michigan in 2008 when she was hit by a car while crossing the street.  Her PIP benefits were initially paid by the driver’s insurer, Farm Bureau Insurance Company, presumably pursuant to MCL 500.3115. Farm Bureau then sought and obtained recoupment of its payments from the father’s insurance carrier, Home Owners, pursuant to MCL 300.3114(1). The lawsuit before the Court of Appeals involved the attempt by Home Owners to obtain recoupment from Allstate, the insurer of Marana’s grandparents.

The parties in Home Owners v Allstate were able to agree that Marana was domiciled with her mother and maternal grandparents in Pennsylvania at the time of the accident.  The question was whether MCL 500.3163 would bring Marana’s maternal grandparents’ out-of-state policy with Allstate into the Michigan no-fault priority scheme where the out-of-state party was not operating a vehicle in Michigan at the time of the accident.

The Court of Appeals noted that under the original formulation of the statute, Allstate would not be liable because MCL 500.3163(1) specifically states that it only applies to “accidental bodily injury or property damage occurring in this state arising from the ownership, operation, maintenance, or use of a motor vehicle as a motor vehicle by an out-of-state resident.”  The cases of Mills v Auto-Owners, 413 Mich 567 (1982) (involving a motorcyclist) and Edquist v. Cadillac Mut. Inc. Co., 119 Mich App 801 (1982) (involving a pedestrian) made this point clear.

However, in 2002, the Legislature amended the law to add MCL 500.3163(4) which states:

(4) If an insurer of an out-of-state resident is required to provide benefits under subsections (1) to (3) to that out-of-state resident for accidental bodily injury for an accident in which the out-of-state resident was not an occupant of a motor vehicle registered in this state, the insurer is only liable for the amount of ultimate loss sustained up to $500,000.00.

Plaintiff argued that in adopting §3163(4), the Legislature was implicitly overruling Mills and Edquist, and was extending coverage under out-of-state policies to all “non-occupants of a motor vehicle”.  The Court of Appeals disagreed.  The Court found that §3163(4) only sets forth a conditional compound so that, where plaintiff could not show that Allstate is “required to provide benefits” pursuant to §3163(1), §3163(4) does not apply.  Therefore, Allstate was not liable for payment of PIP benefits in this case.

Unfortunately, the Court of Appeals did not fully address or analyze the more substantive reasoning behind why §3163(4) would not apply in this case.  Specifically, §3163(4) does not imply that §3163 coverage extends to pedestrians at all.  Rather, §3163(4) distinguishes between situations involving a non-resident being an occupant of a vehicle registered in Michigan, from situations involving a non-resident being an occupant of a vehicle not registered in Michigan.  In the former case, when the non-resident is occupying a vehicle registered in Michigan, the out-of-state insurer does not get the benefit of the $500,000 cap on damages.  In the latter case, when the non-resident is occupying a vehicle not registered in Michigan, the out-of-state insurer’s liability is capped at $500,000.




The 2nd Annual Rivalry Seminar will take place on Friday, October 16, 2015, at Weber’s Inn, in Ann Arbor.  Please note, this is a complimentary seminar for our clients.  Contact Eileen Carty to register: or (800) 875-7600.

Click here for the seminar agenda.




The Buckeye Seminar will take place on Thursday, October 22nd, 2015, at the Greater Columbus Convention Center.  Please note, this is a complimentary, full-day seminar for our clients.  In the morning, we will present No-Fault Updates and other topics.  Lunch will then be provided, followed by John Whitman’s Deposition Boot Camp in the afternoon.

Contact Eileen Carty to register: or (800) 875-7600

Click here for the seminar agenda.