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No-Fault Insurance
Wayne State University Law School
Miller, Wayne J.

No-Fault Insurance Law
Outline
Miller – Winter, 2012



I.              Introduction
A.      No-fault law split your right to claim benefits into two
1.      Economic loss – get from no-fault
a.       PIP – 1st party coverage
b.       Wage loss – only lasts 3 years
c.        Replacement services
d.       Allowable expenses
e.        Survivors loss
2.      Non-economic loss – get from the at-fault party
a.       Need to meet tort threshold – consists of one or more of 3 things
i.         Death
ii.        Permanent disfigurement
iii.      Serious impairment of bodily function
a.)      May need to have a catastrophic loss to meet the new standard for serious impairment of bodily function
B.      Michigan legislature stepped in in 1987 to form the Michigan Catastrophic Claims Association to reimburse the no-fault insurance companies
II.             Mandatory Insurance
A.      Because mandatory it is required to be affordable
B.      Basic requirement of mandatory insurance: §3101(1)
1.      “The owner or registrant of a motor vehicle required to be registered in this state shall maintain…”
a.       Personal Protection Insurance (no-fault) (PIP) (1st party coverage)
b.       Property Protection Insurance
c.        Residual Liability Insurance
2.      Collision coverage is not required
C.      Motor vehicles that are “required to be registered”
1.      Defined by Motor Vehicle Code, MCLA 257.216
2.      Basically every motor vehicle on the highway
3.      Important exceptions including US government vehicles
D.      A motor vehicle is:
1.      §3101(2)(e): “ ‘Motor vehicle’ means a vehicle, including a trailer, operated or designed for operation upon a public highway by power other than muscular power which has more than 2 wheels.”
a.       Motor vehicle does not include a motorcycle or farm tractor, or other implement of husbandry
b.       Fork lifts aren’t included when not being operated on a public highway and neither are snowmobiles
c.        Spatial location matters with certain “vehicles”
d.       Trailers are included, even if not attached to a truck
e.        Dual purpose vehicles
i.         Bialochowski v. Cross Concrete
a.)      Cement mixer – boom extended and pouring concrete, boom broke and fell on him
b.)      Ct. held there was coverage b/c the vehicle was doing one of its dual purposes of pouring concrete
c.)      Has been largely overruled
d.)      Hypo of toy car
f.        Registration is not required to qualify as a motor vehicle
i.         Lee v. DAIIE
a.)      All that is required for no-fault benefits to be payable is a MVA
b.)      Fact that it is not required to be registered does not make it no longer a motor vehicle
E.       Owners
1.      Person considered “owner” or “registrant” has statutory obligation to insure the vehicle under no-fault law
a.       Either/or
b.       NOTE: if getting a ride from someone everyday for a year, might be considered as “having the use of,” so will want to make sure that actual owner/titleholder/registrant has insurance
2.      Under §3101(2)(h) there are 3 classes of owners
a.       A person “having the use” of a motor vehicle for greater than 30 days (you don’t actually have to have the car for 30 days as long as you have the right to possession)
i.         Twichel
a.)      If the lease or other arrangement under which the person has use of the vehicle is such that the right of use will extend beyond 30 days, that person is the “owner” at the inception of the arrangement
ii.        Ardt
a.)      “Having use of” means using the vehicle in ways that comport with concepts of ownership
b.       A person “who holds the legal title to a vehicle” other than person engaged in business of leasing MV
c.        A person who has immediate right of possession under an installment contract
3.      A motorcycle title holder is the only one who is deemed an owner for purposes of no-fault; a person who uses a motorcycle for more than 30 days will not be deemed an owner (Hoadley) – 3101(2)(h)(i) says person renting or having use of MV – motorcycle is not MV, so cant get ownership through use of
4.      Issues of ownership/registration
a.       Madar: No longer owner or registrant, but still insured
i.         Ct. held that P was entitled to no-fault
ii.        Priority insurer was his own b/c still had insurance
iii.      Fact that P no longer owner or registrant of the vehicle was irrelevant
b.       Cason: No longer owner, but still registrant, still insured
i.         Responsible for insurance of the motor vehicle as the “registrant” of the motor vehicle
c.        Clevenger: No longer owner, but still registrant
i.         Required to maintain no-fault (an obligation on “registrant”)
d.       Allstate: No longer owner, but terminated registration
i.         Ct. held registration was terminated here b/c unlike Clevenger, he removed his license plate, registration, and certification of insurance from the vehicle before giving the new owner possession (even though he was unable to cancel registration)
ii.        Ct. held these actions, in conjunction with the bona fide sale of the vehicle, destroyed status as owner and as registrant
5.      Mandatory insurance for motorcycles: §3103
a.       Motorcyclists need not purchase insurance per §3101
b.       Motorcyclists must purchase property damage and liability coverage under §3103
c.        Motorcycles that meet the ORV definition are exempt from the insurance requirement under §3103, regardless of whether it is registered as an ORV or not
6.      The saga of Coffey v. State Farm (go-kart case)
a.       Single go-kart accident, go-kart being driven on public highway
i.         Designed for track, but once driven on public highway, becomes a MV (meets definition under 3101(2)(e))
b.       Ct. said when operated on public highway had to be registered and thus insured, b/c not insured, owner was disqualified
c.        Case would come out same if he was in an accident involving a car, still disqualified because in uninsured MV
d.       Kind of crazy because cannot get registration/insurance for a go-kart
F.       Duties of Non-Resident Owners
1.      § 3102(1)
a.       If non-resident is the owner or registrant of a MV not registered in MI but uses the MV in MI for more than 30 days in any calendar year, that individual must purchase mandatory NF insurance coverage
i.         Aggregated 30 day period
2.      Read 3102(1) in conjunction with 3136
a.       Non-residents are given free ride for the first 30 days that they use in MI a vehicle registered and insured in another state
i.         After 30 days, 3102(1) requires owner or registrant to purchase MI NF coverage for that MV
III.            Coverage
A.      §3105: The Gateway Section – Circumstances that trigger entitlement to no-fault benefits
B.      When no dispute about facts, issue of whether injury arose out of o, o, m, or use of MV is  legal question for the courts to decide, not jury (Putkamer)
1.      When making determination, courts should keep in mind that NF statute is “remedial in nature and is to be liberally construed in favor of persons who are intended to be benefitted from it”
C.      4 part test
1.      Motor vehicle involvement
a.       Motor vehicle, as defined in §3101(2)(e) is in some way involved in the injury – in some way connected
b.       Does not require actual physical collision with a MV
2.       “Accidental Bodily Injury”
a.       “Bodily injury”
i.         There must be a single injury producing event having a temporal and special location (Wheeler)
a.)      Prolonged exposure to MV use does not give rise to coverage
ii.        Does not include
a.)      Back injury from wear and tear from unloading things from a truck
b.)      Long term condition that develops from prolonged driving
c.)      Psychological condition caused by kid dying in accident (especially when P doesn’t witness the accident)
iii.      Can include
a.)      When a car accident aggravates a pre-existing condition – there has to be an accident though
b.)      Psychological injuries that have a causal connection to MVA – have to view the accident
1.)     I.e. witnessing your kid get hit by car
c.)      Heart attack – but must be caused by a single stressful event involving a car (i.e. loading
b.       §3105(4) “Bodily injury is accidental…unless suffered intentionally by the injured person…”
i.         We don’t look at intent of assailant, look at intent of injured person
ii.        Has to be specific intent (hard to prove)
a.)      Have to intend both the act that leads to the injury and the result of injury
3.      “Arising out of ”: No-fault “causal nexus” analysis
a.       Is there a sufficient causal nexus between the injury and ownership, maintenance, or use of a MV
b.       Weird cases
i.         Toxic fumes from cargo being hauled (Denning)
a.)      Because vehicle not vented?
b.)      Movement of car cause emission of fumes?
c.)      Could it have occurred in closed building?
ii.        Inner tube being pulled by car (Smith) – coverage here

criminal act not “closely related to the ‘transportation function’ of motor vehicles”
c.)      Should have used vehicular use test instead
vi.     Moreno v. Farmers
a.)      P was injured when he was struck by a piece of concrete thrown at the vehicle in which he was riding
b.)      “His injuries did not arise our of the use of a motor vehicle as a motor vehicle”
e.        Conclusions to assault cases
i.         Fair to say that Mann is overruled, not necessarily Saunders when dealing with an unknown source
ii.        If a person is at fault there will be no coverage
iii.      Where truly a projectile is of unknown origin, and within ordinary risk of driving a motor vehicle – it should be covered
iv.     If we look at test – it is with vehicular function and ordinary risk of driving
v.       Garden variety things that happen with a motor vehicle include getting hit by projectiles
vi.      Line is razor thin
vii.    Criminal assaults that take place in, near, around cars – no coverage
a.)      Thornton
viii.   **Consider – what is unique about a car (i.e. movement, motion)**
ix.      Projectiles
a.)      If person hit by bullet, this is an assault – no coverage
b.)      If bullet hits tire, then you lose control of vehicle and hit something and injured – coverage
1.)     Bullet didn’t cause injury, car crash did
c.)      Consider – what is mechanism of injury?
x.       Ordinary risks of motoring
a.)      NOT shootings
xi.      Concrete from bridge
a.)      If thrown intentionally, negligently – no coverage
b.)      If falls from a bridge in disrepair – need to ask: is it the motion/speed of car that makes the injury happen?
xii.    Pushed out of moving MV and injured from hitting street
a.)      Coverage, injuries from movement of vehicle while being used in transportation function
4.      Motor vehicle “as a motor vehicle”
a.       Closely related to transportational function of car
b.       Bialochowski (1987)
i.         Motor vehicle is “not limited to normal vehicular movement on a highway”
a.)      **Disapproved by court in McKenzie
c.        McKenzie v. AAA
i.         Non-fatal asphyxiation while sleeping in camper/trailer
ii.        Ct. denied no-fault benefits
iii.      Ct. imposes a stricter causal nexus test than Bialochowski; basically overrules dual purpose doctrine
iv.      New test: the injury must be related to the “transportational function” of motor vehicles
a.)      Here, being used for its sleeping accomodations
v.       Similar to “vehicular use,” “functional character or functional use” of a motor vehicle
D.      Out of State MVAs: §3111
1.      No-fault benefits payable if:
a.       MVA is injured in US, territories and possessions, or Canada, and
b.       Injured person is a named insured, or spouse or resident relative or
c.        Occupant in a vehicle whose owner/registrant is MI NF insured
2.      Extends NF benefits to insured MI resident rents a MV in another state (even if decline optional rental insurance)
a.       Get under own policy
3.      Extends NF benefits to a hitchhiker (even if from out of state and not named on a policy) that is picked up by insured MI resident that is injured in accident that takes place out of state