Legal Memorandum: Noncoordinated Benefits Insurance in MI

Issue: Under Michigan law, where a new insured is not offered a policy with a noncoordinated benefits provision nor is the coordinated benefits provision explained to the insured, must the insurer provide benefits as if the insured had purchased noncoordinated benefits insurance?

           At issue are the provisions of MCL 500.3109; MSA 24.13109 and MCL 500.3109a; MSA 24.13109(1).  At first blush it might appear that MCL 500.3109(1); MSA 24.13109 required set-off.  That section provides in pertinent part: "Benefits provided or required to be provided under the laws of any state or the federal government shall be subtracted from the personal protection insurance benefits otherwise payable for the injury."  MCL 500.3109; MSA 24.13109.  Workers’ compensation benefits are benefits required to be provided under the laws of any state.  Mathis v Interstate Motor Freight Sys, 408 Mich 164; 289 NW2d 708 (1980).

Further § 3109a provides:

"An insurer providing personal protection insurance benefits shall offer, at appropriately reduced premium rates, deductibles and exclusions reasonably related to other health and accident coverage on the insured.  The deductibles and exclusions required to be offered by this section shall be subject to prior approval by the commissioner and shall apply only to benefits payable to the person named in the policy, the spouse of the insured and any relative of either domiciled in the same household."  MCL 3109a; MSA 24.13109(1)

However, this reasoning fails to properly note the significance of LeBlanc v State Farm Mut Auto […]