Michigan Court of Appeals reinforces the risk insurers face when denying no-fault benefits without a reasonable basis.

In Zielinski v Auto-Owners Insurance Company (unpublished, May 2026), the Court affirmed a substantial attorney fee award under MCL 500.3148(1) after finding that the insurer unreasonably refused or delayed payment of PIP benefits related to the plaintiff's cervical spine surgery.

What makes the decision noteworthy is that the insurer had previously acknowledged to Medicare that the plaintiff suffered a neck injury in the motor vehicle accident, yet later denied payment for the surgery despite treating physicians connecting the procedure to the crash. The jury ultimately found the surgery was reasonable, necessary, and overdue.

The Court upheld an attorney fee award of more than $288,000, emphasizing that Michigan's No-Fault Act is intended to provide "assured, adequate, and prompt compensation" for injured persons. When an insurer lacks a reasonable basis for withholding benefits, exposure can extend well beyond the unpaid medical bills themselves.

Why this matters: A disputed claim is not automatically a reasonable denial. When the medical evidence supports causation and necessity, the cost of getting it wrong may include significant statutory attorney fees in addition to the underlying benefits owed.