The Michigan Court of Appeals addressed whether an insurer can rely on an “owned-vehicle exclusion” to bar PIP benefits when the injured party is the named insured but was driving an uninsured vehicle he owned. A major insurer argued that because the claimant’s Silverado was not a “covered auto,” and because he carried a separate Northwood liability policy, PIP benefits were excluded. The trial court agreed and granted summary disposition.
On appeal, the Court reversed, relying on MemberSelect v. Flesher. In MemberSelect, the Court held that policy exclusions conflicting with MCL 500.3114(1)—which guarantees PIP benefits to the named insured for accidental bodily injury—are unenforceable. The Court explained that the insurer’s narrower exclusion still impermissibly attempted to restrict mandatory no-fault benefits.
The Court also rejected the insurer’s alternative argument that the claimant’s Northwood policy satisfied MCL 500.3101(1), finding a factual dispute remained. The case was remanded for further proceedings.
This decision reinforces that insurers cannot draft around the No-Fault Act: statutory entitlement to PIP benefits prevails over policy exclusions.
Please reach out to your MBL insurance defense attorney with immediate questions or concerns.
Dated: September 30, 2025
