State Farm Denies No Fault Benefits, Saying Wheelchair Was Uninsured; Cutoff Defies ‘Common Sense’ Says One Insurance Specialist
Just when I started to think I’ve seen all of State Farm’s dirty tricks, they do this. When I first read the front page story in Sunday’s Macomb Daily by Jamie Cook about State Farm’s refusal to pay No Fault medical benefits to George Veness, I couldn’t believe it. State Farm is refusing to pay Mr. Veness after he was hit by a car driven by a Shelby Township man because – wait for it – Mr. Veness didn’t have Michigan No Fault auto insurance for his motorized wheelchair.
State Farm’s position is that Mr. Veness’s motorized wheelchair is a “motor vehicle.” In other words, a wheelchair or any motorized scooter should have no fault insurance just like any car or truck. And, because Mr. Veness was “driving” his wheelchair uninsured, State Farm contends that not only should he be denied all No Fault PIP benefits, such as reimbursement for his medical bills, the surgery he now needs, and other medical care, but Mr. Veness should also be barred from bringing a lawsuit for his injuries and pain and suffering under Michigan law because he is (as State Farm claims) an uninsured owner/operator of his wheelchair. Hmmmm.
Under the Michigan No Fault law, because Mr. Veness was struck by a car in his wheelchair, he is able to make a claim for his No Fault benefits (also known as PIP or personal injury protection benefits) from the car that hit him.
Mr. Veness has used a motorized wheelchair since a 2004 work accident left him paralyzed from the waist down. He was using his motorized wheelchair to cross the street when he was struck by a car in 2012.
Welcome to the Bizzaro World of Insurance Law in Michigan
In my 20 years of practicing No Fault law, I’ve seen first-hand some shameful, under-handed and heartless arguments made from insurance companies. I write about many of these cases on the pages of this legal blog, and I regularly publish my own list of the best and worst insurance companies in Michigan.
State Farm was already at the top of my list of worst insurance companies. But this case just solidifies how far the giant insurer will go to avoid paying out on claims.
Who in their right mind would ever say that a paralyzed man using a wheelchair to cross the street is violating the law because he is “driving” uninsured? Is this the kind of “motor vehicle” that lawmakers had in mind when they enacted No Fault in this state?
Are you Driving Uninsured in your Wheelchair or Motorized Scooter?
State Farm’s legal position that a wheelchair is a “motor vehicle” in this case raises an extremely alarming question about the insurance company’s motives:
Is this just one more egregious example of State Farm refusing to pay insurance benefits on a valid and legitimate insurance claim (Michigan does not have insurance bad faith laws or punitive damages, creating the legal environment and financial incentives for giant insurers like State Farm to routinely deny claims with impunity to people seriously injured in automobile accidents)?
Is this a very clever money grab by State Farm? Did State Farm just force every person who is paralyzed or elderly or physically disabled and who requires use of a wheelchair and motorized scooter to buy expensive additional new No Fault auto insurance policies – on all wheelchairs and scooters in the state?!
What Happened To ‘Common Sense’? I realize some readers of this blog might say I am an insurance attorney, or because I help people who need no fault benefits that I am somehow biased. So to get a different perspective on this issue, we invited respected independent insurance agent Jason Verlinde, who is the President of Verlinde Insurance Agency in Richmond, Michigan, to give us his own opinion of this case as an insurance agent.
“It’s a shame that common sense has gone out the window,” he said, reacting to the report about State Farm’s reasoning for denying No Fault benefits to Mr. Veness.
What is most interesting is what Verlinde said about the practical implications of State Farm’s argument – that people who use motorized wheelchairs and scooters must now get auto insurance or risk a similar outcome to Mr. George Veness if they are ever hurt in a car accident. Verlinde told us that based on his experience and based on the eligibility guidelines of the auto insurers he represents as an insurance agent, he believes that an auto insurance policy for a motorized wheelchair would be impossible to get.
“Bottom line is that if the injured individual would not have been able to secure a auto-policy for his wheelchair …, I find it hard to believe that an insurance company can deny PIP coverage based on the fact that he should have insured it,” Verlinde said.
He added that the absurdity of the State Farm argument becomes clearer when the State Farm argument is taken to its logical (or, rather, illogical … as may be the case here) extreme:
“Using this logic, if my children are hit by a vehicle while driving their Barbie or GI Joe battery operated jeep they would not be afforded PIP coverage either.”