Mandatory PIP coverage; MCL 500.3101(1); Priority of PIP benefits; MCL 500.3114(1); Contract provisions conflicting with statute; Meemic Ins Co v Fortson; “Persons, not motor vehicles” principle; MemberSelect Ins Co v Hartford Accident & Indem Co

The court held that defendant-Acceptance could not limit statutorily mandated PIP coverage to accidents involving only the specifically listed “covered auto” because MCL 500.3114(1) provides that a PIP policy “applies to accidental bodily injury to the person named in the policy,” and the conflicting contractual limitation was invalid and required reformation. Plaintiff was injured in an accident in Nevada while driving a friend’s car, and he sought Michigan PIP benefits. Given that his personal auto policy had been canceled, he pursued benefits under a non-trucking “bobtail” policy he purchased from Acceptance for his tractor. Acceptance denied the claim on the ground that the policy applied “only to the Specified ‘Auto’ or ‘Autos’ below,” which listed only the tractor. The trial court agreed, reasoning plaintiff was “‘supposed to get the PIP’” from another carrier and that “‘coverage simply does not apply’” because the accident did not involve the tractor. It further stated that “‘insurers can sell insurance policies that do not include mandatory no-fault coverages.’” On appeal, the court held that PIP is “mandatory,” that the No-Fault Act is “the ‘rule book,’” and that “‘[w]hen a contractual provision in an insurance policy conflicts with a statute, the contractual provision is invalid and the contract must be reformed.’” In MemberSelect, the court rejected the insurer’s attempt to “‘designat[e] autos instead of people for PIP coverage,’” because people “‘not motor vehicles, are insured against PIP loss,’” and the Legislature did not create “a ‘commercial policy’ exception to MCL 500.3114(1).” The court acknowledged the insurer’s reliance on an unpublished bobtail-policy case but explained it was decided before MemberSelect and did not control where the insurer sold a policy that included PIP coverage that must conform to the statute. Reversed and remanded.