Michigan Supreme Court Rules “Base Price” of Van Not Included as “Allowable Expense” Under Personal Insurance Protection Benefits of the No-Fault Automobile Insurance Act

In a 4-1 opinion (JJ. Viviano and McCormack not participating), the Michigan Supreme Court ruled the “base price” of a van was not an allowable PIP expense under the No-Fault Act.  MCL 500.3107(1)(a) permits an injured person to recover personal injury protection (PIP) benefits from an insurer for “[a]llowable expenses consisting of all reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person’s care, recovery, or rehabilitation.”

Here, the Plaintiff claimed he was entitled to the full purchase price of a van, including the necessary expenses associated with modifying the van to accommodate his disability.  The trial court and the Court of Appeals agreed.  Here, the Court reverses, holding that the defendant insurance company was only responsible for the modifications because only the modifications are allowable expenses “for an injured person’s care, recovery, or rehabilitation” under MCL 500.3107(1)(a).

Because the base price of the van is an ordinary transportation expense—an expense that is as necessary for the uninjured as the injured—and is easily separated from the modifications, defendant is not required to pay for it under the no-fault insurance act.

The Supreme Court overruled Court of Appeals decisions that held to the contrary.

Read the opinion here:  Admire v. Auto Owners Insurance


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