Michigan PIP Claims Under Priority Scheme of Sections 3114 and Practice Tips for Claims with MCCA

Transcription

1 Michigan PIP Claims Under Priority Scheme of Sections 3114 and Practice Tips for Claims with MCCA CLM Michigan Chapter February 12, 2015 Rochester, MI

2 Introduction Proper context for analysis of priority: Step No. 1: Is the claimant entitled to PIP benefits? Step No. 2: Is the claimant disqualified from receiving PIP benefits? Step No. 3: Who pays? Determination of priority: Responsible insurer known as insurer of highest priority Based on statute: MCL , 3115, Limitless factual scenarios can arise

3 General Rules of Priority Potential insurers of highest priority: Claimant s insurer Insurer of claimant s spouse or resident relative Insurer of owner or registrant of vehicle Insurer of driver of vehicle More than one insurer can qualify as insurer of highest priority Assigned Claims Fund: MCL Governmental entity established by the No-Fault Act Voluntary participation Last resort Special statute of limitations: two years after assignment, one year after last payment Priority disputes between insurers

4 General Rules of Priority Question No. 1: Was the claimant an occupant or non-occupant? Was the claimant physically in the vehicle at the time of injury? Exceptions: changing flat tire Occupants Controlled by MCL Non-occupants Controlled by MCL

5 Occupants: MCL THE INSURANCE CODE OF 1956 Act 218 of Persons entitled to personal protection insurance benefits or personal injury benefits; recoupment barred; order of priority for claim of motor vehicle occupant or motorcycle operator or passenger; 2 or more insurers in same order of priority; partial recoupment. Sec (1) Except as provided in subsections (2), (3), and (5), a personal protection insurance policy described in section 3101(1) applies to accidental bodily injury to the person named in the policy, the person's spouse, and a relative of either domiciled in the same household, if the injury arises from a motor vehicle accident. A personal injury insurance policy described in section 3103(2) applies to accidental bodily injury to the person named in the policy, the person's spouse, and a relative of either domiciled in the same household, if the injury arises from a motorcycle accident. When personal protection insurance benefits or personal injury benefits described in section 3103(2) are payable to or for the benefit of an injured person under his or her own policy and would also be payable under the policy of his or her spouse, relative, or relative's spouse, the injured person's insurer shall pay all of the benefits and is not entitled to recoupment from the other insurer. (2) A person suffering accidental bodily injury while an operator or a passenger of a motor vehicle operated in the business of transporting passengers shall receive the personal protection insurance benefits to which the person is entitled from the insurer of the motor vehicle. This subsection does not apply to a passenger in the following, unless that passenger is not entitled to personal protection insurance benefits under any other policy: (a) A school bus, as defined by the department of education, providing transportation not prohibited by law.(b) A bus operated by a common carrier of passengers certified by the department of transportation.(c) A bus operating under a government sponsored transportation program.(d) A bus operated by or providing service to a nonprofit organization.(e) A taxicab insured as prescribed in section 3101 or 3102.(f) A bus operated by a canoe or other watercraft, bicycle, or horse livery used only to transport passengers to or from a destination point. (3) An employee, his or her spouse, or a relative of either domiciled in the same household, 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. (4) Except as provided in subsections (1) to (3), a person suffering accidental bodily injury arising from a motor vehicle accident while an occupant of a motor vehicle shall claim personal protection insurance benefits from insurers in the following order of priority:(a) The insurer of the owner or registrant of the vehicle occupied.(b) The insurer of the operator of the vehicle occupied. (5) A person suffering accidental bodily injury arising from a motor vehicle accident which shows evidence of the involvement of a motor vehicle while an operator or passenger of a motorcycle shall claim personal protection insurance benefits from insurers in the following order of priority:(a) The insurer of the owner or registrant of the motor vehicle involved in the accident.(b) The insurer of the operator of the motor vehicle involved in the accident.(c) The motor vehicle insurer of the operator of the motorcycle involved in the accident.(d) The motor vehicle insurer of the owner or registrant of the motorcycle involved in the accident. (6) If 2 or more insurers are in the same order of priority to provide personal protection insurance benefits under subsection (5), an insurer paying benefits due is entitled to partial recoupment from the other insurers in the same order of priority, together with a reasonable amount of partial recoupment of the expense of processing the claim, in order to accomplish equitable distribution of the loss among all of the insurers.

6 Non-occupants: MCL THE INSURANCE CODE OF 1956 Act 218 of Priorities as to claims of persons not occupants of vehicle; partial recoupment; limitation on benefits. Sec (1) Except as provided in subsection (1) of section 3114, a person suffering accidental bodily injury while not an occupant of a motor vehicle shall claim personal protection insurance benefits from insurers in the following order of priority:(a) Insurers of owners or registrants of motor vehicles involved in the accident.(b) Insurers of operators of motor vehicles involved in the accident. (2) When 2 or more insurers are in the same order of priority to provide personal protection insurance benefits an insurer paying benefits due is entitled to partial recoupment from the other insurers in the same order of priority, together with a reasonable amount of partial recoupment of the expense of processing the claim, in order to accomplish equitable distribution of the loss among such insurers. (3) A limit upon the amount of personal protection insurance benefits available because of accidental bodily injury to 1 person arising from 1 motor vehicle accident shall be determined without regard to the number of policies applicable to the accident.

7 Occupants: MCL If the claimant was an occupant, then: Question No. 2: what type of vehicle was occupied? Private vehicle 3.114(1) Vehicle for hire 3.114(2) Employer vehicle 3.114(3) Motorcycle 3.114(5)

8 Occupant of Private Vehicle MCL (1) Occupants of Private Vehicles: MCL (1) Claimant s insurer Insurer of claimant s spouse or resident relative Insurer of owner or registrant of occupied vehicle Insurer of driver of occupied vehicle Assigned Claims Fund Who is a named insured? Rule of primacy Individual identified on dec sheet Not additional/permissive drivers Multiple policies Spouse only includes legal marriages Common law marriages do not count Continues until final judgment of divorce Residence/domicile Factual inquiry with no fixed definition Everyone must have a residence at all times The place where a person has his home, with no present intention of removing, and to which he intends to return after going elsewhere for a longer or shorter time. Factors: claimant s intent, relationship with members of the household, existence of alternative residence, mailing address, possessions at residence, room maintained at residence, dependent on other residents for support?

9 Occupant of Vehicle for Hire MCL (2) Occupants of Vehicles for Hire: MCL (2) Insurer of owner or registrant of occupied vehicle Claimant s insurer Insurer of claimant s spouse or resident relative Insurer of driver of occupied vehicle Assigned Claims Fund What is a vehicle for hire? Generally, commercial vehicles used in the business of transporting people. A primary purpose/incidental nature test is to be applied to determine whether, at the time of an accident, a motor vehicle was operated in the business of transporting passengers pursuant to subsection 3114(2). Does NOT include: school bus, city bus, government bus, non-profit bus, taxi, water taxi Includes ambulances, limousines and airport shuttles

10 Occupant of Employer-Provided Vehicle - MCL (3) Occupants of Employer-Provided Vehicles: MCL (3) Insurer of the vehicle Claimant s insurer Insurer of claimant s spouse or resident relative Insurer of driver of occupied vehicle Assigned Claims Fund Must be a current employee Also includes the employee s spouse and resident relatives No requirement that injury occur while the employee is in the course and scope of employment Employee vs. independent contractor: use the economic reality test Factors: control of duties, payment of wages, right to hire/fire, whether performance of individual s duties is integral to business Independent contractors looks to their own insurer Self-employed individuals

11 Operator/Passenger of Motorcycle MCL (5) Motorcycles: MCL (5) Insurer of owner or registrant of involved vehicle Insurer of operator of involved vehicle PIP coverage not required for motorcycles But, motorcyclists still entitled to PIP benefits Insurer of operator of motorcycle Insurer of owner of motorcycle Assigned Claims Fund

12 Non-occupant MCL (1) Non-Occupants: MCL (1) Claimant s insurer Insurer of claimant s spouse or resident relative Insurer of owner or registrant of involved vehicle Insurer of operator of involved vehicle U.S. government vehicles No-Fault Act does not apply to vehicles owned by federal government Claims against federal government must be presented under the Federal Tort Claims Act FTCA requires showing of negligence No-Fault Act requires no showing of negligence Assigned Claims Fund

13 Multiple insurers of highest priority In some instances a claimant can double dip with respect to medical benefits Uncoordinated PIP and uncoordinated health insurance Not permitted where multiple PIP insurers of highest priority Payment split between insurers on pro rata basis Claimant has the right to deal with one insurer Best practice is for one insurer to pay, then seek reimbursement from the others Assigned Claims Fund Will pay if there is a dispute between insurers Loser pays attorney fees

14 Review Question No. 1: Is the claimant entitled to PIP benefits? Question No. 2: Is the claimant disqualified from receiving PIP benefits? Question No. 3: Was the claimant an occupant of a motor vehicle? Question No. 4: If an occupant, what kind of vehicle was occupied? Refer to relevant chart Question No. 5: Are there other insurers of equal priority?

15 Questions and Answers Presenters James Bradley Attorney Secrest Wardle Dawn Chappuies Medical Manager Progressive Group of Insurance Companies