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Auto Owners Insurance Company v McFarland; (COA-UNP, 11/4/1992; RB #1581)


Michigan Court of Appeals; Docket No. 130715; Unpublished 
Judges Hood, Wahls, and McDonald; Unanimous; Per Curiam 
Official Michigan Reporter Citation:  Not Applicable; Link to Opinion alt  

Not Applicable

Private Contract (Meaning and Intent) 
Underinsured Motorist Coverage: Underinsured Motorist Coverage in General 
Underinsured Motorist Coverage: Setoffs Applicable to Underinsured Motorist Cases   

In this unanimous unpublished per curiam Opinion, the Court of Appeals upheld the validity of an underinsured motorist setoff provision that permitted underinsured motorist benefits to be reduced by any amounts paid to the injured person under the liability section of that policy. Although the court agreed that the setoff provision in question was "at best in artfully worded and clumsily arranged," it was not unambiguous when the policy was read in its entirety. The court stated, "if one remembers that Coverage A is the liability coverage, that Coverage D is the uninsured coverage, and that all provisions that apply to uninsured coverage also apply to underinsured coverage, then the setoff language admits to only one interpretation. Regardless of which benefits are sought or paid first, liability coverage and underinsured motorist coverage will always be setoff from each other.  It is not impermissible or unconscionable to  setoff payments made for the same type of loss, in this case, payments made for non-economic and excess economic losses."  

Michigan auto accident attorney Stephen Sinas is the lead editor of the appellate case summaries published on this site regarding the Michigan auto insurance law. To learn more about how Stephen Sinas and how the Sinas Dramis Law Firm can help you if you have been injured in a Michigan auto accident, visit

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