Articles & Publications 07.08.24

Hidden Costs of Unlimited Care? Why No-Fault Insurance Contracts Should Include Attendant Care Limits, Published in Attorney at Law Magazine

In a column published 7/3, Segal McCambridge Shareholder Stephanie L. Strycharz and Associate A. Solomon Luwoye write about how, under Michigan law, attendant care benefits are typically allowed for purposes of the No-Fault Act. In one particular Michigan case, Smejkal v Beck, the court found that because the couple in question had selected Unlimited Allowable Expenses coverage, their policy required that, following a rather devastating car accident, the insurer was required to cover attendant care hours as there were no exceptions under the policy. This case emphasizes the importance of including unambiguous contractual language in an insurance policy regarding the limitations of such care, however, the question remains as to whether being so explicit could be detrimental to the insurer, particularly when the policy’s provisions might not align with precedent and/or current legislation.

“It is clear that in Michigan, an insurer’s reliance on statutory authority alone may not be sufficient particularly for limiting coverage for personal injury protection (PIP) benefits, as is evident in the Smejkal opinion,” the authors write. “There is also a possibility that other jurisdictions beyond Michigan may adopt this approach.”

Accordingly, Strycharz and Luwoye recommend that when an insured party ops for PIP benefits, Michigan insurance carriers should include explicit language indicating that attendant care benefits are capped at a statutory maximum of eight hours per day or 56 hours per week—provided it is provided by someone related to the injured party, someone who resides in their home, or another close associate. They write that even though courts have held that attendant care benefits are an allowable expense under Michigan’s No-Fault Act, best practices might entail carriers identifying attendant care coverage on the declarations page and specifying that the coverage is capped at the maximum hours allowed.

“Beyond Michigan, and beyond the context of attendant care benefits, we also recommend that in circumstances where a legislation or legal precedent provides for a limitation in terms of certain benefits or coverages in an insurance contract, the insurance carrier should still explicitly indicate such limitation in the insurance contract,” Strycharz and Luwoye write.

Read the story in full; click here (subscriber-based).