Farm Bureau strikes again: no coverage for a substitute vehicle

Farm Bureau is making a concerted effort to compete with Allstate's reputation for callous, obstructive bullying in claims management.  This week, it managed to avoid paying an injured woman's PIP claims by asserting that she could not transfer coverage to a rental vehicle while her vehicle was "in the shop".

The Court noted that the policy was a "business policy" which purported to cover substitute vehicles only for liability and not for PIP benefits.  Although the Plaintiff was the business owner's wife and a designated driver in the policy, she was not a "named insured" under the policy. 

The Court also rejected the injured woman's "equitable estoppel" claim based on the fact that Farm Bureau's payment of benefits  for more than one year induced her to accept coverage under the Farm Bureau policy and to fail to notify the lower-priority carrier who would have been obligated to pay benefits if notified within one year.  The Court rejected this argument because she had "equal access" to the facts--in other words, because she should have understood Farm Bureau's policy even if Farm Bureau didn't.

This appears to be one of a number of cases we have witnessed where an insurer's agent cuts corners to sell a policy and then an injured insured bears a catastrophic cost when the policy turns out not to cover what the parties expected or anticipated.  In Michigan, where insurers like Allstate argue in TV commercials that their agents are looking out for your interests, they should be held to a duty of reasonable care like everyone else.  Unfortunately, under the Engler majority's activist analysis, in Michigan, insurance agents only owe a duty to the insurer to sell as many policies as they can.