Under the amended No-Fault Act, Michiganders can elect to completely opt out of PIP benefits if certain criteria are met under MCL 500.3107d. That provision also makes clear that if an ineffective election to opt out of PIP benefits is made, then the policy is considered to provide unlimited PIP medical coverage. In Northland Radiology v Allstate Fire and Casualty Insurance Company, the Michigan Court of Appeals upheld that principle in a published decision.
On February 1, 2023, Dwight Turner and his mother, Jacqueline Springer, were involved in a motor vehicle accident. Following the accident, Mr. Turner received medical treatment at Northland Radiology. Mr. Turner lived with his mother and did not have his own insurance policy. Ms. Springer had no-fault insurance with Allstate and she had Medicare parts A and B. She chose to opt-out of PIP benefits noting on her application form that she and all her resident relatives had qualifying health insurance. Her application did not list Mr. Turner as a named insured, resident relative, or a listed driver, however. Mr. Turner had health insurance through Medicaid which is not qualified health coverage under section 3107d(7)(b).
Northland Radiology sought payment for Mr. Turner’s treatment from Allstate. Allstate filed for summary disposition on the basis that Ms. Springer opted out of PIP benefits. In response, Northland argued that an ineffective election as to Mr. Turner was made because he did not have the required health insurance such that Allstate was to provide unlimited PIP medical benefits as to Mr. Turner.
The trial court found in favor of Allstate, finding that Allstate was permitted to rely on Ms. Springer’s statements on the opt-out form. The Michigan Court of Appeals reversed the trial court’s ruling. In doing so, the Court heavily relied on the plain language of MCL 500.3107d finding that all five of the conditions necessary for an opt-out must be met and in this case, Mr. Turner did not have the required coverage nor did Ms. Springer provide documentation of Mr. Turner’s qualified health coverage. The Court also noted that under section 3107d(5), an election to opt-out applies to a named insured and their resident relatives and thus, it can be inferred that a failure to effectively opt-out also applies to resident relatives. Yet, Allstate was not required to present Mr. Turner with a separate opt-out form; instead, the form applied to Ms. Springer and Mr. Turner as her resident relative.
Judge Swartzle’s concurrence highlighted the “odd incentives” created by the majority’s decision, and the possible resulting expenses that may now be required to resolve claims. The concurrence noted that even if the policy is later rescinded as to Ms. Springer, it remains an open question whether Allstate might still be required to cover the PIP costs related to Mr. Turner. The majority specifically stated that they had no opinion as to whether or not Allstate could pursue a fraud defense and rescind the policy.
