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Who pays for a truck driver’s No Fault insurance benefits?

November 14, 2014 by Steven M. Gursten

Take our survey and test your knowledge about who’s responsible for an injured trucker’s medical expenses, lost wages, replacement services and other PIP benefits

insurance for truckers

Are you a trucker? The safety manager at a trucking company? Or an adjuster at an insurance company?

How much do you know – or think you might know – about how Michigan’s No Fault laws protects truckers who have been injured?   Who pays for  accident-related medical expenses, lost wages and replacement services, as well as more significant No Fault PIP benefits such as attendant care?

Here’s the common scenario,  based on an actual  Michigan Court of Appeals recent decision:

A commercial truck driver, while on the job, is injured in a one-vehicle truck accident. At the time of the crash, he’s driving a tractor-trailer that is leased by his employer, but owned by another company. One insurance company insures the tractor and another insurance company insures the trailer.

So here’s the survey question:

Who pays for the injured trucker’s No Fault benefits?

Who pays trucker's No Fault benefits

Please tell us what you think by voting in our survey and please feel free to share the survey (via this blog post) with your friends – and, of course, encourage them to vote, too.

Now here’s the short answer to the survey question:

The insurer for the tractor is responsible for paying. Below, I’ll explain why.

In Hamdi v. Citizens Insurance Company of America, et al., the Michigan Court of Appeals had to decide who was going to pay the No Fault benefits for “interstate commercial truck driver” Abdullah Hamdi after he was injured in a truck accident while, “in the course of his employment,” driving a tractor-trailer for his employer, Ayat Trucking, Inc.

Although the tractor-trailer was actually owned by different company, 2 M’s Chalmers Auto Repair, Inc., and leased to Mr. Hamdi’s employer, the dispute over who was going to pay for Mr. Hamdi’s No Fault ultimately boiled down to a battle between insurance companies.

Citizens Insurance Company of America, which covered the tractor, and National Casualty Company, which insured the trailer, pointed fingers at each other – both of them trying to dodge getting stuck with the bill for Mr. Hamdi’s No Fault benefits.

Relying on Michigan’s No Fault Law, the Court of Appeals sided with National, concluding that Citizens, the insurers for the tractor, was on the hook.

The judges’ unanimous ruling was based on the following No Fault provision:

“An employee … who suffers accidental bodily injury while an occupant of a motor vehicle owned or registered by the employer, shall receive personal protection insurance benefits to which the employee is entitled from the insurer of the furnished vehicle.” (MCL 500.3114(3))

As the Court of Appeals explained, Citizens had the highest “priority” to pay No Fault insurance benefits for the following reasons:

  • “[T]here is no dispute that Hamdi [an employee] suffered an accidental bodily injury.”
  • “There is also no dispute that he did so while an occupant of a motor vehicle, as he was driving the tractor, with the trailer attached, on a roadway.”
  • “The specific motor vehicle Hamdi was occupying was the tractor. … The tractor was owned by Hamdi’s employer, Ayat, by virtue of the 12 month lease under application of MCL 500.3101.”
  • “Pursuant to MCL 500.3114(3), then, Hamdi ‘shall receive personal protection insurance benefits to which the employee is entitled from the insurer of the furnished vehicle.’ The insurer ‘of the furnished vehicle’ is Citizens, given that the furnished vehicle, i.e., the one Hamdi was occupying at the time of the accident and the one provided by his employer, was the tractor.”

What about workers compensation? Why didn’t workers comp pay?

The Hamdi opinion didn’t address the issue of workers compensation and/or the application of the Michigan Worker’s Disability Compensation Act to Mr. Hamdi’s truck crash.

It’s a good question, however, as frequently when a truck accident occurs while the driver is on the job, there will be workers compensation benefits also available (even with the nationwide trend by many trucking companies to re-classify truck drivers as “independent contractors” rather than as employees). With work comp, would comp kick in to pay for the injured driver’s medical expenses and lost wages instead of No Fault?

However, things aren’t always that straightforward. I always apologize when I have to “talk like a lawyer” to my clients – but the reality is that as with so many things in our No Fault and workers compensation laws in Michigan, many answers are fact dependent.

As I explained in my blog post, “What insurance is best to protect truckers in case of a truck accident?”:

“Michigan No-Fault insurance will supplement what is not covered by workers compensation, especially when it comes to wage loss over the workers compensation lower base rate.”

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