Maybe. Or not. Michigan’s No Fault auto insurance law doesn’t require drivers to have uninsured or underinsured coverage, so coverage will depend on policy language
When Robert Perry rear-ended a car, he injured his passenger in the process.
That passenger happened to be his wife, Jodi. And under Michigan’s auto law, she has a potential tort claim against her husband for causing her injuries from the car accident.
She sued Robert, claiming he was negligent and that his negligence “cause[d] her to suffer a serious impairment of body function,” thus, entitling her to recover “noneconomic loss” damages, i.e., pain and suffering compensation.
But Jodi didn’t stop at collecting the $20,000 in liability coverage under Robert’s policy with Progressive Marathon Insurance Company.
She also sued for the $250,000 in “underinsured motorist” benefits under Robert’s auto policy.
But the Michigan Court of Appeals slammed on the brakes.
And not because of any special rule under Michigan’s auto No Fault Law or its Insurance Code, or because of the unusual circumstances of a wife suing her husband for causing a car accident.
The ‘plain terms’ control
Instead, because of “the plain terms of the [Progressive] policy,” the Court of Appeals concluded that Jodi Perry “was not entitled to recover uninsured/underinsured motor vehicle benefits.”
Specifically, the court in Perry v. Perry explained that:
- “Because underinsured motorist coverage is not required by Michigan statute, ‘the scope, coverage, and limitations of underinsurance protection are governed by the insurance contract and the law pertaining to contract.’”
- “[U]nder the plain language of the policy, [Jodi Perry] was not entitled to recover underinsured motorist benefits” because her husband’s car — in which she was riding at the time of the accident — “could not constitute” and “could not be considered” an “‘underinsured motor vehicle’ for purposes of” the policy’s “uninsured/underinsured motorist coverage.”
The takeaway message here is:
There’s no hard-and-fast rule about whether one spouse can collect “underinsured motorist” benefits from the other spouse who was at-fault in causing a car accident. Instead, entitlement to benefits will depend on the specific language of the specific policy.
And, as an attorney who centers his practice on auto accident litigation, there was another message from this case:
That is, under Michigan law, underinsured motorist policies are purely contractual. Some are written by the insurance companies to be very restrictive and limiting scope of coverage as much as possible, as was the case here with the underinsured motorist policy written by Progressive.
Progressive’s ‘underinsured’ motorist policy
In his $250,000 “underinsured motorist” policy — for the car he owned and was driving at the time of the auto accident — Robert Perry’s insurer, Progressive, stated that an “underinsured” car does not include “a covered auto.”
It was on this exclusion that the Court of Appeals focused in concluding that Jodi wasn’t entitled to benefits under Robert’s “underinsured motorist” policy:
“Here, it is undisputed that the [car that Robert was driving and in which Jodi was injured] was a covered auto at the time of the accident” and “therefore, [it] could not constitute an ‘underinsured motor vehicle’ for purposes of uninsured/underinsured motorist coverage.”
I’m not a big fan of Progressive for auto insurance, and I’ve written about this company many times before on the pages of this auto law blog. Annoying commercials aside, the policies can be overly restrictive compared to other auto policies.
Make sure your agent is reviewing the actual language of the underinsured motorist policy that he or she is selling you. People buy underinsurance to protect them and their family if they are injured in a car accident and there isn’t enough money on the wrongdoer’s insurance to cover the harms and losses of the crash.
Unless you are the Perrys and have Progressive Insurance.