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Michigan Commissioner Extends Time for Motorists to Sue

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Michigan’s Insurance Commissioner Linda Watters is prohibiting auto insurers from setting limits on the amount of time people can sue for benefits.Watters, who heads the Office of Financial and Insurance Services, announced Wednesday that she has issued an order that would bar insurance companies from imposing one-year limitations on legal suits involving uninsured motorist coverage.Watters said that the order was a reaction to a recent Michigan Supreme Court decision that upheld an insurance policy with a one-year limitation period. Any limitations period below three years is misleading and unreasonable, Watters countered.A spokeswoman for the Michigan Insurance Institute criticized the Commissioner’s decision saying that uninsured coverage is optional under the state’s no-fault system.“It is unfortunate that the commissioner is mandating changes to a contract which is between the insurance company and its policyholders and doing so behind closed doors without any input or dialogue with the insurance industry that we are aware of,” Lori Conarton said in a statement issued from the Michigan Insurance Institute.The case that was the impetus for the Commissioner’s mandate was a ruling in July by the Michigan Supreme Court that involved two women injured in an auto accident. The women involved sued the driver of the other vehicle when they learned she was uninsured. The insurer in the case denied the claim, citing the one-year limitation. The Supreme Court upheld the one-year limitation.Commissioner Watters said the Surpreme Court recognized her authority to police unreasonable provisions in insurance contracts with the goal of protecting consumers.
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