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A Better Partnership
May 31, 2016

MSC to consider whether an insured claiming underinsured motorist benefits is a “third party tort claimant” entitled to penalty interest

In Nickola v. MIC General Insurance Co., No. 152535 the Michigan Supreme Court granted mini-oral argument on the application for leave to appeal to consider two issues: first, whether an insured making a claim for underinsured motorist benefits may be considered to be a “third party tort claimant” under MCL 500.2006(4), thereby requiring the insurer to pay twelve percent interest for failing to pay the claim on a timely basis only if the claim “is not reasonably in dispute”; and second, whether the Court of Appeals decision in this case is consistent with Yaldo v North Pointe Ins Co, 457 Mich 341 (1998), and Griswold Properties, LLC v Lexington Ins Co, 276 Mich App 551 (2007), concerning when penalty interest is payable.
The Court of Appeals, which we blogged about here, held that the Nikolas were more akin to a third party tort claimant and therefore the “reasonably in dispute language” came into play. The COA then held that the claim was reasonably in dispute, therefore preventing the Nickolas from collecting the twelve-percent interest. 

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