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Does stepparent’s No Fault coverage extend to stepchild after biological parent’s death?

January 22, 2015 by Steven M. Gursten

Court rules stepchild is ‘relative’ under No Fault Law & insurance policy because she’s still ‘related by marriage’ to stepparent

Stepparent no fault benefits

Is a stepchild covered by her stepparent’s Michigan No Fault auto insurance coverage – even after the stepchild’s biological parent (who was also the stepparent’s spouse) has passed away?

Yes, said the Michigan Court of Appeals in a recent ruling that relied both on Michigan’s No Fault Law and importantly, on the language of a Nationwide auto insurance policy.

In Patmon v. Nationwide Mutual Fire Insurance Company, Liz Patmon, after being seriously injured in a motor vehicle accident, applied for No Fault benefits through the No Fault auto insurance policy of her stepfather, Melvin Jordan, with whom she was living at the time of the accident.

Nationwide denied the claim.  The family hired an attorney to help them secure No Fault PIP benefits.

The auto insurer insisted that, because Patmon’s mother – who had been Jordan’s wife – was deceased, Patmon was not a “relative” and, thus, was ineligible for No Fault insurance benefits through Jordan’s auto insurance policy.

Generally, No Fault PIP benefits under a Michigan No Fault auto insurance policy apply “to the person named in the policy, the person’s spouse, and a relative of either domiciled in the same household …” (MCL 500.3114(1))

The No Fault law does not define “relative,” but Nationwide’s policy did.

And it was that definition that was used in the Nationwide policy the auto insurer tried – unsuccessfully – to use to deny Patmon’s No Fault PIP benefits.

In its policy, Nationwide defined “relative” as:

A person “who regularly lives in [a Nationwide insured’s] household and who is related to [a Nationwide insured] by … marriage …”

Now here’ s where it gets interesting: Nationwide’s lawyer argued that Patmon was not related to Jordan “by … marriage” because Patmon’s mother had deceased and, thus, the marital relationship connecting Patmon to Jordan had been severed.

But the Michigan Court of Appeals disagreed with Nationwide, concluding that Patmon met the auto insurer’s policy definition of “relative”:

“Given that the common use and understanding of the term ‘stepchildren’ encompasses a relationship that persists even after the biological parent’s death, the [Nationwide] policy affords coverage when a stepchild’s domicile remains with the named insured, as here.”

*    *    *

“We conclude that the common understanding of the term ‘related by marriage’ incorporates a stepparent relationship that continues even after the death of the biological parent …”

Significantly, at the beginning of its legal analysis, the Court of Appeals made the following observation:

“Nationwide does not dispute that if Patmon’s mother were still alive, Patmon would be ‘related by marriage’ to Jordan as his stepdaughter. Thus, by common understanding the term ‘related to you by . . . marriage’ encompasses the stepparent/stepchild relationship, at least while the biological parent remains alive.”

Ultimately, the Court of Appeals agreed with the trial court that Nationwide was responsible for paying Patmon’s No Fault benefits.

Related information:

This insurance company belongs in the hall of shame

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