The No-Fault Act (NFA); First-party no-fault priority dispute; Whether an insured made an effective election to opt out of personal protection insurance (PIP) medical coverage; MCL 500.3107d; Love v Rudolph; Northland Radiology, Inc v Allstate Fire & Cas Ins Co; Michigan Automobile Insurance Placement Facility (MAIPF)

The court held that defendants-Farm Bureau’s insured (nonparty-A) did not make “an effective election to opt out of PIP coverage in her no-fault policy because her failure to list her resident relatives and provide proof of their qualifying health coverage rendered her election ineffective.” Thus, it concluded the trial court erred in granting Farm Bureau summary disposition and denying defendant-MAIPF summary disposition in this first-party no-fault priority dispute. Based on the ineffective election, Farm Bureau’s policy provided unlimited PIP coverage to A’s injured resident relative (IL) and plaintiff was “entitled to recovery as her provider.” Reading the relevant 2019 NFA amendments together, the court held in Love that they “allow a named insured to ‘decline PIP coverage for allowable expenses if the name[d] insured is “a qualified person,” meaning the named insured has health coverage under parts A and B of Medicare, and if household relatives also have the described required other coverage.’” And in Northland, it recently addressed the issue underlying this appeal, “whether an insured had made an effective opt-out election.” It concluded here that “some of the requirements to make an effective opt-out election were met. However, [A] failed to establish that her resident relatives had qualified health coverage or were covered under another auto policy with PIP medical coverage or provide proof of such qualified health coverage.” Given that “the statute requires that the named insured and his or her resident relatives have qualified health coverage to opt out of allowable expenses in a no-fault policy,” A’s election was ineffective due to “the lack of qualified coverage of her resident relatives. Her failure to establish all the requirements to opt out rendered her election ineffective.” The court in Northland also found “that ‘an ineffective opt-out is applicable to the applicant or named insured, their spouse, resident relatives, and any other person who may have a right to claim PIP benefits under the policy[.]’” Reversed and remanded.