The term “order of priority” (OOP) refers to the set of rules that outline which no-fault insurer or entity has primary responsibility for payment of personal injury protection (PIP) benefits arising out of a motor vehicle accident. The rules for passengers in motor vehicles for hire are complex and can lead to situations where the named insured’s policy isn’t first in the OOP.
Therefore, it is important to know the type and ownership of the vehicle involved in the accident. In most situations one policy applies. However, where more than one policy applies the relevant statutes provide guidance and will likely be clarified overtime by case law.
For private passenger auto under the old priority, uninsured occupants and non-occupants could seek PIP benefits from the owner/operator of the vehicle. The new statutory framework changed the order of priority as these individuals will no longer seek PIP benefits from the owner/operator of the vehicle.
In most situations, injured parties will get coverage from their own policy, even when the named insured has selected the qualified health exclusion or the Medicare opt-out. However, there are certain exceptions:
- Motorcycles - Occupants or operators of motorcycles first go to the owner of the vehicle. See motorcycle slide for more details.
- Certain vehicles for hire. Examples: ambulance, limo, airport shuttle. See “Vehicle Type B” on the vehicles for hire slide. For more details.
Uninsured occupants injured in a motor vehicle accident will make claims to the Michigan Assigned Claims Plan for benefits. This does not apply to those insured on a policy with a qualified health coverage exclusion or Medicare opt-out policy (with no coverage).
For more questions, give us a call at (517) 482-1316.