On Thursday, September 8, between 8:10 and 8:45 AM, Attorney Gerald H. Ackerwill be interviewed by WXYZ-TV regarding step-down provisions that are
hidden in many insurance policies. Step-down provisions, often referred
to as “intra-family” exclusionary clauses, are amongst the
major hidden provisions that can leave a person underinsured.
This clause can reduce a person’s liability coverage to the state-required
minimum of $20,000/$40,000 (per person/per accident) if a family member
is at fault for
a crash and another family member is injured as a result.
Below is an example of how a step-down clause might affect a person and
his or her family members:
A driver has $500,000 worth of coverage. However, his policy includes a
step-down clause. One day, he drives his car with his daughter and his
daughter’s friend as passengers. He causes a crash, and both suffer
injuries as a result of the accident. Because he has a step-down clause
in his policy, his daughter (the driver’s daughter) can only recover
a limited amount. So then, the insurance company’s liability coverage
for the daughter is capped at the state-mandated minimum of $20,000, while
the other child (the daughter’s friend) can make a claim up to the
How Are These Clauses Concealed in Policies?
The language used to describe or address these clauses is often hidden
An example of how such a provision might appear in a policy is written below:
“Coverage under this Part I, including our duty to defend, will not
apply to any insured person for…Bodily injury to you or a relative.
This exclusion applies only to damages in excess of the minimum limit
mandated by the motor vehicle financial responsibility law of Michigan.”
Oftentimes, insurance companies do not inform individuals about this provision.
In some cases, insurance adjusters are not even aware that a policy includes
a step-down clause because it is often standard for certain insurance
carriers to include them.
Insurance Carriers that Tend to Include Step-Down Clauses
Our team at Goodman Acker P.C. has found that
the following carriers tend to integrate step-down provisions in their policies:
- Grange Insurance
- Farm Bureau Insurance
How to Ensure Step-Down Provisions Do Not Negatively Affect You
When challenged, Michigan’s appellate courts have consistently upheld
step-down provisions. Unfortunately, the Michigan Insurance Commissioner
has done nothing to eliminate the use of such clauses.
As a result, our Detroit personal injury lawyers have recommended that
individuals complete the following practices to ensure these provisions
do not negatively affect them:
- Spread the word about the clauses and the dangers they present
- Review insurance policies and ask friends and family members to review
their insurance policies
- If an auto insurance policy includes a step-down clause, consider purchasing
a new policy with an insurance company that does not use step-down clauses
- Write to the Michigan Insurance Commissioner
Have Questions or Concerns Regarding Your Insurance Policy? Call Our Team
If you have any questions about your insurance and have been injured in
an accident we recommend you call our office right away.
Don’t wait to get in touch with experienced legal counsel.
Contact Goodman Acker P.C. as soon as possible!