What happened: Michigan’s appeals court ruled that a driver who opted out of PIP medical coverage cannot claim those benefits through the state’s assigned claims plan.
Who’s involved: Michigan Automobile Insurance Placement Facility (MAIPF) and Auto-Owners Insurance Company.
What’s at stake: PIP medical benefits for injuries including a broken leg and pulmonary embolism.
Why it matters: Drivers who took the Medicare opt-out to save on premiums may have no fallback if injured as pedestrians.
Where it stands: Decided - trial court reversed, remanded for summary disposition in favor of MAIPF.
A chain-reaction crash left a Michigan driver with a broken leg, a pulmonary embolism, and a coverage gap he didn’t expect.
In December 2022, a rear-end collision turned ugly fast. The driver and the other motorist pulled over and stepped out to check the damage. A third vehicle then slammed into the back of the line, forcing one car forward into both of them.
He carried an Auto-Owners Insurance Company policy on his Honda CRV but had opted out of PIP medical coverage. He qualified under MCL 500.3107d because he held Medicare Parts A and B. The trade-off was a lower premium.
Because he was outside his vehicle when the second impact hit, he filed a claim with the Michigan Automobile Insurance Placement Facility as a nonoccupant - someone injured while not inside a car. The MAIPF runs the state’s assigned claims plan, the insurer-of-last-resort system for people without applicable no-fault coverage.
The MAIPF said no. His Auto-Owners policy was identifiable and applicable, even without medical coverage.
No court had answered the question before: can a driver who gave up PIP medical coverage fall back on the assigned claims plan when injured as a pedestrian?
The Michigan Court of Appeals, in a unanimous published decision, held that a policy with a Medicare opt-out is still a PIP policy under MCL 500.3101(1). The opt-out strips one component of coverage. It does not strip the policy of its character as personal protection insurance. Because the policy remained “applicable to the injury” under MCL 500.3172(1), none of the four statutory gateways into the plan were open.
The court leaned on its 2024 decision, which established that the plan’s statutes carry independent eligibility requirements a claimant cannot skip.
The driver pointed to a gap in the statute. MCL 500.3114(4) explicitly bars occupant opt-outers from the plan, but the nonoccupant provision says nothing about them. The court acknowledged “some persuasive value” but called the gap a likely “unintended consequence of the Legislature amending the ever-complex” no-fault act.
Any Michigan claims team processing PIP files for Medicare or QHC opt-out policyholders now has a clear answer: the assigned claims plan will not step in, even when the insured is injured outside their vehicle.
