Michigan Coverage Decisions, Issue 190

Dragen Perkovic v. Zurich American Ins. Co.

Published. Decided September 10, 2015, Michigan Court of Appeals Docket No. 321531

Plaintiff was injured in a car accident and sought treatment for his injuries. Within three months of the accident, the hospital submitted a medical bill for services to the plaintiff. The defendant insurer denied the claim. Plaintiff then filed suit and more than a year after the accident, added the defendant insurer. The insurer filed summary disposition arguing that no written notice was provided within the year following the accident. The trial court granted summary disposition in favor of the insurer.

The Court of Appeals affirmed the lower court decision on the basis that no written letter or notice form as sent that would alert the insurer of a potential no-fault claim. Notice of injury, which was unrelated to a possible claim for no-fault benefits did not trigger the insurer’s investigation procedures, was insufficient to provide notice under the statute.

Kallas & Henk Note
This decision has been appealed to the Supreme Court and is currently pending on appeal.

 

Craft Recreation Company, LLC v. Home-Owners Ins. Co.

Unpublished. Decided September 15, 2015, Michigan Court of Appeals Docket No. 321435

This insurance dispute arose out of a total loss fire. The policy provides that the insurance will not pay on a replacement cost basis until the damaged property has been repaired or replaced and also will not pay more than the limit or the cost to replace the damaged property with property of comparable material and quality. The trial court relied on Cortez v. Fire Ins. Exchange, finding that the policy language fell under §2827,therefore, plaintiff was entitled to recover the policy limit with requiring the insured to rebuild or repair.

The Court of Appeals upheld the trial court decision that the policy falls under §2827 and the insurance carrier was required to pay the policy limits to the plaintiff without regard to whether the structure was actually repaired or replaced as the damage exceeded the policy limits.

Kallas & Henk Note
An application for leave to the Supreme Court has been filed and is currently under consideration.

 

Emmett Grimmett v. Farmers Ins. Exchange

Unpublished. Decided October 6, 2015, Michigan Court of Appeals Docket No. 321492

The plaintiff was injured in an accident with an allegedly uninsured motor vehicle. The policy terms required the insured to provide notice within 24 hours to the police and 30 days to the insurance company if the accident involved a hit-and-run vehicle. The defendant carrier denied the claim based on the failure to provide timely notice. The trial court granted summary disposition in favor of the insurer based on the insured’s failure to comply with policy conditions.

While the Court of Appeals found a question of fact existed as to whether the company was provided notice within the 30-day required time period, the court affirmed based on the failure of the policy holder or claimant to contact the police within 24 hours of the accident.

Kallas & Henk Note
The Court properly enforced  policy conditions according to the terms and did not insert a judicially created requirement of “prejudice”.

 

John and Donna Hohensee d/b/a River City Lanes v. Nasser Insurance Agency et. al.

Unpublished. Decided November 3, 2015, Michigan Court of Appeals Docket No. 321434

Plaintiff-policyholders were severely underinsured and suffered a total fire loss. They claimed that the insurance agent misrepresented the coverage provided in the event of a total loss. The trial court granted summary disposition in favor of the insurance agency and agent based on the fact that the policyholders admitted that they never read the insurance contract, therefore, were not entitled to claim misrepresentation because there was no reasonable reliance on the insurance agent’s statements.

The Court of Appeals affirmed finding that the policyholders could not maintain an action based on misrepresentation based on the failure to read the policy or negligence based on the lack of causation and that the insurance agent did not breach any duty to the policyholders.

Kallas & Henk Note
The court followed the long-standing principles regarding the insured’s obligations to read the insurance policy and to raise questions concerning coverage within a reasonable time and that the insured is charged with knowledge of the terms and conditions of the insurance policy.

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