No-fault insurance; PIP benefits; Motorcycle accident; Order of priority; MCL 500.3114(5); Exhaustion of higher-priority coverage; Mary Free Bed Rehab Hosp v Esurance Prop & Cas Ins Co; Uninsured motorist (UM) benefits; Underinsured motorist (UIM) benefits; Policy interpretation; Twichel v MIC Gen Ins Corp; Named insured; Covered auto

The court held that plaintiff could pursue PIP benefits from a lower-priority insurer after exhausting higher-priority motorcycle-accident coverage, but that she was not entitled to UM/UIM benefits under the lower-priority insurer’s (Federated Reserve) policy. Plaintiff was injured while driving her motorcycle, and the first-priority insurer paid its $250,000 PIP medical-benefits limit and $50,000 bodily-injury liability limit. On appeal, the court first reversed summary disposition on plaintiff’s PIP claim against Federated Reserve. In Mary Free Bed, the court held that “the plain language of MCL 500.3114(5) allows an injured motorcyclist . . . to recover from such lower-priority insurers once coverage by a higher-priority insurer is exhausted.” The court there also explained that “nothing in the language of Section 3114(5), which sets out a sequential list of insurers, prohibits continuing down the priority ladder” if higher-priority coverage is inadequate. But the court here affirmed dismissal of plaintiff’s UM/UIM claims. Because UM/UIM coverage is not mandatory under the No-Fault Act, the policy was interpreted under ordinary contract principles. The court held that nonparty-Bruner Plumbing & Heating was the named insured, and because plaintiff’s motorcycle was owned by plaintiff rather than the corporation, it was not a “covered auto.” The court also held that plaintiff did not qualify under the broadened coverage endorsement because, even assuming a motorcycle was an auto, the expanded definition excluded any auto owned by the named individual or a family member, and the motorcycle was owned by plaintiff. Affirmed in part, reversed in part, and remanded.