Auto Insurers Must Take Proper Action or Residual Liability Coverage of $250,000 Applies; Insured's Non-Cooperation is No Defense
Michigan auto no-fault laws require an insured to take affirmative action before an auto insurer can reduce the liability limits of an auto insurance policy below the statutorily required minimum coverage of $250,000 per person and $500,000 per accident. Failure to do this could spell trouble for the auto insurer.
In the published Michigan Court of Appeals decision in Progressive Marathon Ins Co v Espinoza-Solis, theCourt recited the requirements of MCL §500.3009(1) which plainly imposes a minimum coverage amount of $250,000 per person and $500,000 per accident unless the insured has requested lower insurance limits of coverage.
In this case Progressive claimed that its insured was not cooperating with the defense of the personal injury case which had been filed against him, justifying Progressive’s decision to reduce the amount of available insurance coverage. The Court of Appeals disagreed, citing the 1986 Michigan Supreme Court’s decision in Coburn v Fox which had held “[b]because of the compulsory nature of the liability insurance, the noncooperation of the insured is not a good defense in an action between a third-party victim and an insurer to the extent of the statutorily required minimum residual liability insurance.”
The Court of Appeals in Progressive Marathon Ins Co v Espinoza-Solis affirmed the default judgment against Progressive’s insured in the amount of $250,000 because its insured did not elect a lower coverage. The insured’s non-cooperation in the defense of the claim did not relieve the insurer from paying the higher limits.
Read entire case at:
Progressive Marathon Ins Co v Espinoza-Solis
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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.
Attorneys practice in all state and federal courts in Michigan, including Wayne County (Detroit), Macomb County (Mount Clemens), Oakland County (Pontiac), Washtenaw County (Ann Arbor), and Genesee County (Flint). Legal services are also provided in Northern Ohio. Since its founding in 1992, the firm has litigated over 4,000 civil cases.
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