Mich. Court Decision Could Have Auto Insurance Implications

Brown gavelA major change that may affect Michigan drivers was made official by the state Supreme Court last weekend. The court’s decision in McCormick v. Carrier effectively changes the legal definition of “serious bodily impairment” in a way that established a lower threshold. The state Supreme Court’s 4-3 ruling overturns the higher standards set in a 2004 case.

The new ruling says injuries that prevent someone from engaging in their normal activities for any period of time can be considered enough reason to file for non-economic pain and damages, according to the Insurance Journal.

The 2004 Kreiner case was a landmark ruling that helped define the interpretation of what is considered to be “serious impairment of body function,” as well as the rights of car accident victims. Due to the Kreiner case, victims have to prove the following in order to receive non-economic pain and suffering damages: objectively manifested medical injury, loss of an important body function and an impairment of their ability to lead a normal life.

The Insurance Journal reports that the court determined that “Kreiner imposed claims restrictions that exceeded the plain language and intent of the no-fault law.”

According to the Insurance Journal, the new case involving Rodney McCormick revolved around a milder injury than the 2004 case. McCormick suffered injuries due to his ankle being run over by a truck at work. While he was not injured to the extent that he could never work again, he still suffered “pain and reduced motion,” the Journal said.

A lower court ruled that McCormick’s injuries were not severe enough for a non-economic claim, reports the Insurance Journal. But the Michigan Supreme Court overturned that decision, citing that McCormick’s injuries prevented him from leading a normal life.

While accident victims may be pleased with the recent ruling, not everyone supports the legal action. Insurers who are against the ruling say that it undermines Michigan’s “no-fault” law. The no-fault law says that people who are involved in an accident are entitled to receive compensation for “economic losses” even if they are found to be at fault.

The Insurance Institute of Michigan says that the ruling will ultimately result in higher MI auto insurance rates for motorists and possibly lay the foundation for more claims.

“We are gravely concerned about the impact of this decision on our policyholders,” said IIM Executive Director Pete Kuhnmuench. “This ruling impacts the fundamental concept of no-fault, which balances comprehensive and immediate benefits in exchange for limits on costly personal injury lawsuits.”

About John Pirro
John Pirro is a licensed fire and casualty insurance agent specializing in various aspects of the auto insurance industry. He worked in the auto body repair industry before taking a reporting position at Online Auto Insurance News.

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