MAIPF Claim Doesn’t Toll One-Year Statute of Limitations for Personal Injury Protection Insurance Claims
In most Michigan car accidents, the drivers act responsibly, remaining on the scene and exchanging insurance and contact information. In such cases, identifying applicable personal injury protection (“PIP”) insurance coverage for injuries and losses and pursuing a timely claim against the insurer is relatively straightforward. But in hit-and-run accidents and other scenarios, the existence of applicable coverage and the insurer’s identity may remain a mystery – at least for some time.
When that ” time” lasts for more than one year after the accident, the statute of limitations precludes any claims against the insurer for recovery of PIP benefits. And under Michigan case law, the subsequent discovery of such insurance after the one-year time limit does not toll the statute of limitations even if the injury victim initiated a claim against an Assigned Claim Facility within the limitations period.
Pursuing Injury Claims in the Absence of Identifiable PIP Coverage
When a person injured in a Michigan car accident cannot identify any applicable PIP coverage, they will look to the Michigan Automobile Insurance Placement Facility (“MAIPF”) for redress and compensation. MCL 500.3172(1)(b). The injured party must complete the MAIPF’s application and produce reasonable proof of loss. The MAIPF will then determine whether the claimant is eligible for benefits through the Michigan Assigned Claims Plan (“MACP”) and assign an approved claim to an insurer.
However, it is not unheard of for an injury victim or assigned insurer to discover the existence of a higher-priority insurer after initiating a claim with the MAIPF. In such cases, the injury victim may file suit against the newly identified insurer and seek benefits under its PIP coverage.
If that suit is filed within the one-year statute of limitations for PIP claims (MCL 500.3145), it is timely, and the insurer would not be able to avail themselves of a limitations defense. Conversely, an insurer would likely seek and obtain summary disposition in their favor on limitations grounds if the claimant filed suit after one year.
However, a claimant faced with a limitations defense may assert that their timely and pending claim with the MAIPF arising out of the same accident tolls the limitations period, thus allowing their claim against the PIP insurer to proceed.
Fortunately for insurers, Michigan courts have found this tolling argument unpersuasive.
Unsuccessful Good Faith Efforts to Identify PIP Insurer Make No Difference as to Timeliness of Claim
In Hunt v Citizens Insurance Company, the plaintiff suffered injuries in an accident with another vehicle that fled the scene. Within one year of the accident, the plaintiff initiated an action against the Assigned Claims Facility, which assigned the claim to Citizens Insurance Company. It was later discovered that Allstate was the insurance carrier of the vehicle that struck the plaintiff and fled the scene. Over a year after the accident, the plaintiff amended his complaint to add Allstate as a party.
The trial court granted summary disposition in favor of Allstate, rejecting the plaintiff’s argument that the limitation period pertaining to Allstate was tolled because the plaintiff filed their claim against the Assigned Claims Facility within one year. The Court of Appeals affirmed, explaining that “when an action is commenced against one party, the § 3145 period of limitation is not tolled as to other potential parties who may not have been named as defendants in the suit.”
The court went on to note that the inability of a plaintiff to identify the insurer within the limitations period despite good faith efforts to do so does not change the analysis: “The fact that [plaintiff] in the exercise of due diligence, could not or did not identify Allstate as the appropriate insurer is not enough to toll the period of limitation as to Allstate.”
Subsequent appellate decisions have followed Hunt and rejected similar tolling arguments. In Allen v Farm Bureau Insurance Company, for example, the court affirmed the trial court’s grant of summary disposition in favor of a later-named insurer who did not receive notice of the claim within one year. The court noted that while the limitations period for PIP claims is admittedly short, tolling that period would not be consistent with the purposes of Michigan’s No-Fault Act:
“While it is true that the one-year period of limitation is relatively short, it seems consonant with the legislative purpose in the no-fault act in encouraging claimants to bring their claims to court within a reasonable time and the reciprocal obligations of insurers to adjust and pay claims seasonably. The statute attempts to protect against stale claims and protracted litigations.”
MAIPF claims will be more frequent under the 2019 amendments to the Michigan No-Fault Act because occupants of motor vehicles without identifiable insurance in their homes will look to the MAIPF for benefits.
Therefore, in light of Hunt and Allen, insurance carriers should carefully assess a case’s facts when evaluating whether it is liable to pay PIP benefits when notice is received more than one year from the date of the subject accident, even if the insured has already filed a claim through the MAIPF.