Recent Case Underscores Importance of Language in Insurance Policies

Grimmett shows the importance of adhering to the provisions of your auto insurance policy – failure to do so can result in the denial of benefits.

As lawyers at a firm that has represented thousands of Michiganders involved in auto accidents, we know and can appreciate the importance of the language used in michigan-auto-insurance-policyauto insurance policies, especially in the no-fault realm. The language used in policies dictate the rights and responsibilities you have, and failure to pay attention or follow the dictates of your policy may very well impact your ability to collect no-fault benefits.

A recent, unpublished per curiam opinion from the Michigan Court of Appeals underscores the significance of contract language. In Grimmett v Farmers Ins Exchange, the plaintiff drove his sister’s vehicle, which was insured by defendant Farmers. In addition to covering the plaintiff and his sister, the policy also covered incidents involving uninsured motorists, defined as “drivers who [did] not hold a relevant insurance policy,” or those who “perpetrated ‘hit and run’ accidents.” Grimmett, at *1.

The policy required that the plaintiff’s sister do a number of things if a crash involving an uninsured motorist occurred, including letting Farmers know as soon as possible, giving them information about the nature and circumstances of the crash. In addition, she was required to alert law enforcement with 24 hours of the accident. Specifically, the policy provided as follows:

“In the event of an accident, or loss, notice must be given to us [i.e., Farmers] promptly. The notice must give the time, place, and circumstances of the accident, or loss, including the names and addresses of injured persons and witnesses.”

. . .

“A person claiming any coverage of this policy must also:

. . .

6. Notify police within 24 hours and us within 30 days if a hit-and-run motorist is involved and an uninsured motorist claim is to be filed.”

Grimmett, at *2.

Plaintiff and his sister claim that they notified the insurance company of the alleged hit and run incident “within a week of the accident” and was told that the car was a total loss; it was subsequently towed within a month of the accident. Defendant Farmers, however, disputed this narrative, claiming that it neither received notice of the incident nor towed the vehicle until September – almost two months after the accident took place. Further, while plaintiff claimed the other driver and a bystander called 911 to report the accident, there was no record of emergency personnel or law enforcement responding to the incident in question, and no record of those calls ever being placed. Therefore, as far as Farmers was concerned, due to the failure to notify police within 24 hours of the incident as well as the failure to notify the insurance company within 30 days of the accident, it refused to pay for the damage claim.

The Court of Appeals affirmed the trial court’s disposition but did take issue with the reasons for which the lower court did so. First, given that there was a dispute regarding when notice was given to Farmers about the incident (plaintiff claimed it was provided within 30 days of the accident, while Farmers disagrees), the trial court should have submitted that question of fact to the jury – there should have been a trial on the issue: “Accordingly, when the documentary evidence is viewed in the light most favorable to plaintiff, ‘a genuine issue of material fact’ exists and a trial must be held to properly resolve the matter. The trial court, therefore, erred when it granted summary disposition to Farmers on this basis.Grimmett, at *4.

Remember, however, that plaintiff was also required to notify police within 24 hours of the incident. Both the plaintiff and his sister admitted that while the driver and a bystander allegedly contacted 911, neither one of them did so. For this reason, the Court of Appeals upheld the dismissal of plaintiff’s case against Farmers Insurance. The trial court should not have dismissed the case based on the failure to notify the insurance company (for the reasons described above), but dismissal was nonetheless appropriate because of the failure to notify law enforcement. As the Court of Appeals noted, “The failure of plaintiff or his sister to inform the police of the accident within 24 hours of the accident is fatal to plaintiff’s suit because the insurance policy at issue clearly requires the ‘person claiming any coverage of [the] policy to ‘notify police within 24 hours of the accident.” Grimmett, at *4.

What is the lesson here? Pay close attention to the language contained in your policy. When you are given a limited period within which to contact your insurance company or police after an accident, failure to do so may cost you in benefits, as it did in the Grimmett case. If the language used in the auto insurance policy is deemed to be clear and unambiguous, it may be difficult to prevail in court if you failed to adhere to it.

Our Michigan no-fault attorneys form an experienced legal team equipped to handle your car, motorcycle, semi-truck accident case, and are well-versed in understanding and navigating auto policies. We can help you understand your rights and responsibilities both under your insurance policy as well as the auto no-fault insurance law. Don’t hesitate to contact our firm for a free consultation today.

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