Home-Owners Insurance Company loses appeal on PIP benefits and Uninsured Motorist Coverage
Frank Camaj was rear-ended late on a weekend night by an unidentified driver who left the scene. Camaj reported the incident to Home-Owners on Monday morning but never called the police. He later filed suit against Home-Owners seeking benefits under his Personal Injury Protection (PIP) and Uninsured Motorist Coverage (UMC). Home-Owners (a subsidiary of Auto-Owners) denied Camaj's right to any benefits. In a confused, pre-McCormick summary disposition procedure, the Court upheld the dismissal of Camaj's serious impairment claim for non-economic losses, denied the insurer's motion to dismiss his wage loss claim, and rejected the insurer's argument that Camaj's failure to report the incident to police within 24 hours invalidated his coverage.On appeal, the Court first returned the case for analysis under the McCormick, rather than the now-discredited Kreiner decision. The Court noted that Camaj had documented an objectively-manifested injury and therefore his "threshold" claim must be investigated under the newer standard based on the original statutory language. Pursuant to McCormick, the Court must evaluate whether Camaj's general ability to lead his normal life was significantly "affected" by his injuries--not whether it was "destroyed."
The Court further noted that a claim of wage loss is independent of the "serious impairment" threshold. Since Camaj alleged that he had recovered from a previous heart attack and had been offered a job just prior to his injury, the Court must independently evaluate whether he had suffered a "loss of income from work he would have performed."
Finally, the Court also directed the lower court to investigate whether Camaj had "substantially complied" with his contractual obligations, even though he had not reported the incident to police within 24 hours. The Court noted that the insurer did not deny that the event had occurred or allege any prejudice resulting from the failure to report the incident within one day. Noting a conflict of decisions with regard to whether this type of policy provision will be enforced without consideration of "substantial compliance" or prejudice, the Court concluded that the latter evaluation is more reasonable and consistent with Michigan law on contracts.