INSURED’S ELECTION OF LOWER BODILY INJURY LIABILITY LIMITS RULED INEFFECTIVE
In a published Michigan Court of Appeals case, the Court of Appeals considered whether an insured’s election to reduce his Michigan auto bodily injury liability limits after the auto bodily injury policy was issued was effective to reduce the available coverage.
In Michigan, an auto insured must request in writing the state minimum B.I. coverage of $50,000. If there is no election, the default coverage is $250,000. The insured purchased his auto insurance without making an election of bodily injury liability limits. He was then involved in a double fatality motor vehicle accident. The insurer wanted to limit the bodily injury limits to the state mandated minimum of $50,000 instead of the state default liability limit of $250,000. The Estate wanted the higher limits.
On June 22, 2020 the Insurer issued an auto policy with the statutory minimum B.I. coverage of $50,000. On July 21, 2020, realizing that the insured had not elected the state minimum coverage, the Insurance Company issued a new policy with the default B.I. coverage of $250,000. One month later in August 2022, the insured signed a “Michigan Choice of Bodily Injury Liability Limits” asking for the $50,000 minimum B.I. liability coverage. The MVA occurred on December 2, 2020.
The election to reduce bodily injury coverage was ineffective because it was not made when the policy was first issued. The Court of Appeals relied upon MCL §500.3009 (5), (7), (8). The choice-of-coverage form was not filed when the policy was issued as required by statute. The insured must “have already made an ‘effective choice’ by the time the policy is issued, or when the policy is issued,” according to the Court of Appeals.
The Trial Court decision in favor of the insurer was reversed. The matter was remanded back to the Trial Court for entry of a Judgement in favor if the Estate
Read entire case at:
State Farm Mut. Auto. Ins. Co. v Estate of Fortin
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Alexander & Angelas, P.C. represents defendants in civil liability litigation across Michigan and Northern Ohio. The firm’s practice areas include insurance defense litigation, premises liability, motor carrier (trucking) defense, corporate and commercial litigation, construction defect litigation, auto negligence, insurance coverage disputes, emergency casualty response services, alternative dispute resolution, subrogation claims, workers’ compensation, employment law, and liquor liability.
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