Not everyone has their own auto insurance policy. Spouses and parents often include the whole family under one policy. But what happens if your teen driver is in an accident or your spouse is hit by a car? Can you get PIP benefits for a family member in your home?
Short Answer: Resident Relatives are Entitled to PIP Benefits
The Michigan No-Fault Act is designed to make sure, with a few limited exceptions, everyone in the state is covered if they are injured in a motor vehicle accident. That includes family members who don’t have their own policy. The No-Fault Act requires every insurance policy for personal injury protection (PIP) to include coverage of the “named insured” (the policy holder), along with his or her spouse and any relative living within the same household. That ensures that if your kids are hurt in a car accident you can still get PIP benefits for their injuries (as long as they live with you the majority of the time).
If your “family” doesn’t follow blood lines, most insurance providers allow you to name additional insureds to the policy for an additional expense. You can use this to cover “cousins” and live-in partners who you haven’t married yet.
But Watch Out for Excluded Operators
However, the law does allow insurance companies to give you the option to exclude specific drivers from your policy. A recent case Bronson Health Care Grp Inc v State Auto Mut Ins Co explains what happens when an excluded driver is injured while driving your car.
In Bronson Health, Victor Caballero was driving his wife Maria’s vehicle when he was injured in a car crash. He was treated for his injuries by Bronson Health Care Group, which filed a claim for No-Fault benefits on his behalf after he assigned the claim to them. But State Auto Mutual Insurance Company, the insurer who covered Maria and her car, said that Victor wasn’t entitled to benefits. He was one of 4 excluded operators listed in Maria’s policy.
Bronson argued that the contract didn’t specifically say Victor couldn’t receive PIP benefits; it just listed several other types of excluded coverage. However, the Michigan Court of Appeals said the Michigan No-Fault Act, not the specific language of the contract, applied.
Under the law, if you are going to exclude a driver from coverage, your policy must clearly label them as an excluded operator, and it must contain a notice on the face of the policy or declarations page:
“Warning—when a named excluded person operates a vehicle all liability coverage is void—no one is insured. Owners of the vehicle and others legally responsible for the acts of the named excluded person remain fully personally liable.”
Because Victor was a named excluded person in a policy that contained the required warning, he and his health care providers were prevented from recovering PIP benefits for his car accident injuries.
Why You Might Exclude an Operator
With the cost of medical care so high, you might wonder why anyone would choose to exclude a family member from their no-fault insurance policy. However, sometimes a family member’s past driving record, suspended license, or young age makes them very expensive to insure. If you know that your spouse won’t be driving for a year because his license was suspended for drunk driving, or your teenager is going to wait until 18 to get her license, it may make sense to add them as a named excluded operator while you are sure they won’t be behind the wheel.
However, if you do make this decision be certain you remember to change your policy once the named excluded driver starts driving again. This may push your premiums up because of the points on his license or her age and inexperience. But the money you receive for PIP benefits if they are in a serious auto accident later will more than make up the difference.
The Macomb Law Group, is a personal injury law firm in Clinton Township, MI. Our attorneys can help you get PIP benefits for your spouse or relative after a serious-injury auto accident. Contact Macomb Law Group and get our team working for you.