Pioneer State Mutual leaves daughter-in-law holding the bag

Tammy Sue Long borrowed the in-laws' car for the day.  She was involved in a bad car accident, causing injury to Janice and Brian Kammers.  No problem because her parents had purchased $300,000.00 in liability coverage on the vehicle, right?  Wrong.  Pioneer's fine print limits its liability coverage to $20,000.00 if the vehicle is operated by anyone other than the "named insureds" and family members living with them.   Citing this provision of the policy, the Court of Appeals ruled this week that Tammy Sue Long was entitled to only $20,000.00 in liability protection.  The Court noted that under prior rulings of the Republican State Supreme Court Majority, while it is illegal for an insurer to deny coverage to a non-owner, it may limit coverage to the 1974 state minimum--$20,000.00 per injury--and this is not a violation of public policy.  Regardless of the premium paid by the insureds or the fact that they permitted the use of the vehicle by the driver. 

The Court did not address an additional question:  since the Longs remained responsible for the full amount of damages caused by a permitted operator, why didn't the higher coverage limits they purchased apply to the Kammers' injuries?  Maybe the answer is just "because the insurance company says so."  That seems to be the rule of law in Michigan.