Health care provider of "Named Excluded Driver" cannot collect PIP benefits

Bronson Methodist Hospital sued Progressive Michigan and the Assigned Claims Plan, seeking payment for hospital services provided to Danielle Pillars after a car accident.  Pillars owned the vehicle involved, but she had not purchased insurance; probably because it was too expensive given her driving record.  Her finace insured the vehicle with Progressive, whose policy named Pillars as an "excluded driver."  Under the policy, all coverages were voided if Pillars was operating the vehicle.

Bronson argued that the policy language violated Michigan public policy and that Progresssive should be required to pay for Pillars' medical care.  The Court of Appeals upheld the trial court's conclusion that an insurer may sell coverage on a vehicle where the owner is an "excluded driver" and then void coverage involving the owner.  This arrangement is at least arguably fair, in the sense that Progressive examined Pillars' risk profile, apparently, and refused to accept it. 

One can argue that Progressive's actions enabled Pillars' fiance to legally use the car by insuring it.  Unfortunately, on the other hand, Progressive's tactic more likely represents a "nod and wink" to the fact that everyone knew Pillars would be driving the vehicle, and Progressive allowed it on the road by issuing illusory coverage.  If nothing happened, Progressive collected premiums.  If something bad happened (the purpose for buying insurance, after all) Progressive could void the coverage. 

Since Pillars owned the vehicle and was apparently a known risk, she should have been forced to buy more expensive coverage commensurate with the risk her driving record presented.  In that way, taxpayers and medical providers would be protected from her medical expenses, and she would be forced to buy insurance that was appropriately priced, given her profile for risky behavior.  Furthermore, injured innocent victims would have been granted the benefit of some degree of liability coverage, which seems appropriate given PIllars' (apparent) propensity for mayhem.