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Insurers manipulate ‘care’ to deny No Fault benefits to those that need it most

April 16, 2013 by Steven M. Gursten

Disturbing trend in misinterpretation of what constitutes ‘care’ for purposes of No Fault benefits

It’s sadly no secret that Michigan’s auto insurance companies will jump at the chance to cut vital No Fault benefits to auto accident victims.  In a state without bad faith laws to protect accident victims, there is often very little that most people can do when claims adjusters and insurance companies start to play games with injured lives.

The latest strategy is now on full display.  It is also one that will cause enormous and unnecessary hardship to those affected.

We are now seeing a new insurance industry’s campaign to rein in the payment of No Fault insurance benefits to the most catastrophically and seriously injured  auto accident victims by targeting the word “care.” This is systematically being done in a way that defies both common sense and the plain and unambiguous meaning of the language used in the Michigan No Fault Law.

And as a result, Michigan’s auto insurance companies are leaving catastrophically and seriously injured auto accident victims without the No Fault benefits and vital protections they need  to obtain the products, services and accommodations that have always been considered part of what is reasonably necessary for their “care.”

Allow me to further explain.

No Fault benefits for ‘an injured person’s care’

Under Michigan’s No Fault Law, auto insurers must “pay benefits” for all of the auto-accident-related “products, services and accommodations” that are “reasonably necessary” for “an injured person’s care …” (MCL 500.3105(1); 500.3107(1)(a))

Historically, there has not been any time or monetary restrictions on the necessary  benefits for “an injured person’s care.” As such, a No Fault auto insurer is obligated to pay for what is reasonably necessary and medically required over the lifetime of a catastrophically injured auto accident victim.

But Michigan No Fault auto insurers don’t want to pay for too much ‘care’

So what has recently changed?  Auto insurers, along with the help of the now Republican Michigan Supreme Court, zeroed in on the meaning of the word “care.”

And, by “zeroed in,” they set about to manipulate  the meaning of “care” as it’s always been used in the No Fault Law in this state.

The Supreme Court set upon a course which has played out in a series of rulings, starting with Griffith and including Johnson v. Recca (2012) and Douglas v. Allstate (2012), whereby the court has systematically changed the meaning of “care” and, in the process, effectively rewritten the No Fault Law.

Ignoring its own stated judicial philosophy that the plain statutory language is the best indication of the Legislature’s intent, the Supreme Court has misconstrued in a series of decisions the plain and unambiguous phrase “an injured person’s care.” They have instead read into it meanings that are clearly adverse to the intent of the No Fault Law in Michigan, and that the Legislature would have clearly articulated in the No Fault Act if that was what the Legislature had truly intended.

For example, the Supreme Court has said the following about the No Fault Law’s simple, clear phrase “an injured person’s care”:

  • It “suggests that ‘care’ must be related to the insured’s injuries.” (Griffith)
  • The “Legislature intended to limit the scope of the term ‘care’ to expenses for those products, services and accommodations whose provision is necessitated by the injury sustained in the motor vehicle accident.” (Griffith)
  • “Care” benefits “do not include expenses for products or services that are required after the injury in a manner indistinguishable from those required before the injury. … Services that were required both before and after the injury, but after the injury can no longer be provided by the injured person himself or herself because of the injury” are not covered by No Fault “care” benefits. (Johnson)
  • To be covered by No Fault “care” benefits, “the services must be related to the insured’s injuries.” (Douglas)
  • No Fault “care” benefits “must be necessitated by the injury sustained in the motor vehicle accident.” (Douglas)

It bears repeating that the No Fault Law says none of the things that the Supreme Court has read into the No Fault Law’s simple, but clear, phrase: “an injured person’s care.”

Vital No Fault benefits now being denied to those that need them most

The services that have been denied coverage under No Fault “care” benefits due to the auto insurance industry’s campaign to manipulate the meaning of “care” are significant, and, unfortunately, the list of denied services is growing:

  • In Griffith, the Supreme Court ruled that No Fault “care” benefits did not include the food expenses for a car accident victim whose traumatic brain injury has confined him to a wheelchair and rendered in need of assistance with eating and bathing.
  • In Johnson, the Supreme Court rendered its judicial-rewrite of the No Fault law in the context of overturning decades-old law which allowed catastrophically and seriously injured auto accident victims to sue for excess “Replacement Services” benefits, i.e., reimbursement for replacement services in excess of the $20/day and 3-year maximums.
  • In ZCD Transportation, Inc., v. State Farm Mutual Automobile Insurance Company, the Michigan Court of Appeals ruled that transportation services for a seriously injured car accident victim were not covered by No Fault “care” benefits.
  • In In Re Cisneros (Fullmer v. Auto Club Insurance Association) and in In Re Carroll (May v. Auto Club Insurance Association), the Michigan Court of Appeals ruled that conservator’s expenses and fees are not covered by No Fault “care” benefits.

The sad part of all of this is the devastating personal consequences that it will leave in its wake.  Accident victims will literally be shut in their own homes if they are not being transported to medical appointments.

The double whammy of redefining what is considered replacement services, while at the same time (and for the first time in 40 years) eliminating accident victims’ right to sue for excess replacement services is a vicious one-two punch that defies the very principles of our tort law – to make innocent victims whole.

For more information, click here to read a comprehensive analysis of Michigan No Fault reform and the latest developments.

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