Court reluctantly rejects insurer's effort to impose new policy term on insureds

Cynthia Ruzak was very badly hurt in a car wreck caused by her husband.  She made a claim against his auto policy, but USAA, the insurer argued that under the terms of its policy it did not have to pay the purchased policy limits to a family member of the insured.  Ruzak sued, arguing that USAA's "exclusion" language was against public policy and should not apply in any case because it wasn't in her original policy and if added later, it had not been explained to her. 

The Grand Traverse Circuit Judge reviewed current law and noted that the activist Engler Majority of Michigan's Supreme Court had upheld similar exclusionary language.  Nevertheless, he refused to apply the exclusion in this case because the language wasn't contained in the Ruzak's original Wisconsin policy (where it would be illegal) and there was no proof that it was properly documented to the Ruzaks on renewal.  This week the Court of Appeals reluctantly upheld the trial court's decision, but only because a prior Court of Appeals decision on the issue had already issued without appeal, making the decision the "law of the case."