The Michigan Court of Appeals recently affirmed, in a published decision, that Michigan law allows for insurance policies to provide broader coverage than the minimum mandated by the no-fault act, and that attendant care benefits are an allowable expense for purposes of the no-fault act. These undisputed legal findings were the basis for the Court’s determination that when an insurance policy explicitly lists “Allowable Expenses (Medical)”, which explicitly includes attendant care, and an insured selects unlimited coverage for allowable expenses, the policy provides broader coverage than the newly amended statutory provisions of the no-fault act. Smejkal v Home-Owners Ins Co, ___ Mich App ___ (COA No. 363394, April 18, 2024).
In Smejkal, Plaintiff was injured in a December 2020 motor vehicle accident and claimed PIP benefits from Home-Owners including 24 hours a day of attendant care. Home-Owners moved for partial summary disposition as to the attendant care claim, arguing that the 2019 amendments to the no-fault act capped Plaintiff’s attendant care at 8 hours per day, or 56 hours per week. MCL 500.3157(10). Plaintiff argued he was entitled to unlimited allowable expenses, which included unlimited attendant care so the statutory cap on attendant care hours did not apply. MCL 500.3157(11).
The trial court granted Home-Owner’s motion noting that MCL 500.3107c addresses an insured’s choice between four dollar amounts of PIP coverage, one of which is unlimited coverage. MCL 500.3157(10), on the other hand, addresses the number of attendant care hours for which an insured is entitled to be reimbursed. The trial court believed Plaintiff merely selected an unlimited dollar amount, not an unlimited number of hours. The trial court was concerned that selecting an unlimited dollar amount under MCL 500.3107c(1)(d) did not mean an insured automatically contracted in avoidance of the statutory hour cap in MCL 500.3157(10) and (11). Plaintiff’s interpretation, the trial court believed, would render subsections (10) and (11) meaningless because whenever an insured selected an unlimited dollar amount under section 3107c(1)(d), that insured would always trigger subsection 11.
On appeal, the Court noted the merit of the trial court’s interpretation of the policy language and the no-fault act, and its concerns, but determined the policy’s particular language in this case controlled. The policy explicitly listed “Allowable Expenses (Medical),” which explicitly included attendant care, and Plaintiff selected unlimited coverage. Plaintiff did not select a mere unlimited dollar amount. Rather, he selected “boundless and infinite coverage for allowable expenses, which included attendant care.”
The Court identified circumstances in which a policy could allow for unlimited PIP benefits in terms of the dollar amount while still restricting attendant care hours to 56 hours per week. To do so, and avoid the result in the present case, insurers must not allow insureds to select unlimited allowable expenses. Or, insurers could include a provision explicitly providing that unlimited coverage does not include attendant care hours. Plaintiff’s policy in this case, however, allowed Plaintiff to select unlimited dollar amounts and unlimited attendant care hours. Because parties may contract for broader coverage than what the no-fault act mandates, Plaintiff’s policy in this case controls.
The Court further determined that, while the policy included a provision that allowable expenses were “subject to limitations of Chapter 31 of the Michigan Insurance Code,” that provision appeared to be a boilerplate. It was simply a general incorporation of the No-Fault Act rather than an explicit invocation of the default hourly cap within MCL 500.3157(10).
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Sarah Nadeau, Editor of The Garan Report Publication, is a Shareholder in our Detroit Office. Sarah can be reached at 313.446.1530 or snadeau@garanlucow.com