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Michigan Court Reverses Car Insurance Decision

Just the same as Louisiana mandatory auto insurance laws, other states keep careful watch over their own insurance regulations. Four years after first ruling on the case, the Michigan Supreme Court reversed its own ruling in favor of a man who had sought pain and suffering damages after getting injured on the job and missing significant time at work. The man was run over by a loading truck while performing his job duties and missed more than a year and a half before he was able to get back to work. The Michigan Supreme Court in reversing its earlier call ruled in favor of Rodney McCormick, a resident in the Flint MI area and an employee of General Motors. In the original ruling by the state appellate court, the majority opinion stated that Michigan law limits claims for so called non economic (or pain and suffering) damages to individuals who had their lives in some way permanently affected by an accident. But when it looked over the case a second time, it came to no such conclusion in interpreting that part of Michigan car insurance law.

Insurance Lawyers vs. Plaintiffs' Attorneys

The result of the case in its immediacy has to be seen as a victory for plaintiffs and for Michigan drivers in general. It gives them a greater ability to make claims for pain and suffering above and beyond the actual financial damages inflicted upon them as a result of an accident. Of course, on the flip side of this victory it must also be acknowledged that if the decision sets precedent, state auto owners could be in for higher auto insurance prices as time goes by and insurance companies absorb losses in these types of cases.

Obviously, the state auto insurance industry was strongly in favor of the original 2006 decision, since it limited insurers' possible financial liability by defining those limits in a specific way. This reversal by the Michigan Supreme Court is a definite setback for the state auto insurance lobby and for the state industry as a whole. Insurers and plaintiffs' lawyers remained split even after the decision. Insurers argued vehemently that the new interpretation of the law would invariably lead to an increase in litigation and as a result, higher insurance premiums across the board for state drivers.

Lawyers representing plaintiffs in these types of case, on the other hand, maintained that the decision by the Supreme Court thrust the state back into the mainstream of individual protection under the law. To them, the original decision put Michigan drivers in an unenviable position nationwide with respect to motorists elsewhere; and this reversal simply levels the field once again. In fact, many argued that all the reversal did was restore the rights that state drivers always had under no fault law ever since its inception.

Details of McCormick Case

Rodney McCormick broke his ankle and needed surgery to correct it after being run over on the job. The surgery impaired his ability to function normally for a number of months, according to the suit. But he was eventually healed completely and able to get back to doing the things he had done prior to the accident, including getting back to work.

According to the majority opinion, the McCormick case met the requirements set forth by the state legislature, which allow victims to file suit for pain and suffering when serious impairment of bodily function occurs as a result of their injuries suffered in an accident. The majority believed that the original 2006 decision went too far in protecting the law and overstepped the state legislature's original intent in creating it and including the part about serious body function impairment.

The court was split 4 to 3 on the case, with the minority noting that the majority decision created an abrupt reversal in the court, and even going so far as to question whether the new decision might pose a threat to the financial solvency of the state's no fault auto insurance system. The way the system is set up, in general terms, favors limiting of litigation on the part of accident victims in exchange for more lucrative benefits from local car insurance providers.

Potential Impact of Court Decision

The possible impact of the Michigan Supreme Court's reversal in the 2006 McCormick case is difficult to predict. It is possible that increased lawsuits will lead to higher costs taken on by insurance companies, and as a result, higher premiums paid out by drivers. But one of the variables is this idea of serious impairment of body function. Although the decision narrowed down that definition somewhat, it is still somewhat open to interpretation. Only time will tell what the exact effect this case has on auto insurance in Michigan. But state policy holders should keep an eye on cases like these to understand how precedent is set and where possible cost increases might come from.

[1] Retrieved 2010-08-08.


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