May 31, 2005, Introduced by Reps. Condino, Lipsey, Alma Smith, Bieda, Gleason, Kolb, Donigan, Miller, Plakas, Vagnozzi, Cushingberry, Gonzales, Meisner and Anderson and referred to the Committee on Insurance.
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending sections 3009, 3103, 3116, 3135, and 3177 (MCL
500.3009, 500.3103, 500.3116, 500.3135, and 500.3177), section 3009
as amended by 1988 PA 43, section 3103 as amended by 1986 PA 173,
section 3135 as amended by 2002 PA 697, and section 3177 as amended
by 1984 PA 426.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 3009. (1) An automobile liability or motor vehicle
liability policy insuring against loss resulting from liability
imposed by law for property damage, bodily injury, or death
suffered by any person arising out of the ownership, operation,
maintenance, or use of a motor vehicle shall not be delivered or
issued for delivery in this state with respect to any motor vehicle
registered or principally garaged in this state unless the
liability coverage is subject to a limit, exclusive of interest and
costs, of not less than $20,000.00 because of bodily injury to or
death of 1 person in any 1 accident, and subject to that limit for
1 person, to a limit of not less than $40,000.00 because of bodily
injury to or death of 2 or more persons in any 1 accident, and to a
limit of not less than $10,000.00 because of injury to or
destruction of property of others in any accident.
(2) If authorized by the insured, automobile liability or
motor vehicle liability coverage may be excluded when a vehicle is
operated
by a named person. Such This
exclusion shall is not be
valid unless the following notice is on the face of the policy or
the declaration page or certificate of the policy and on the
certificate of insurance:
"Warning—when a named excluded person operates a vehicle all
liability coverage is void—no one is insured. Owners of the vehicle
and others legally responsible for the acts of the named excluded
person remain fully personally liable."
(3) If an insurer deletes coverages from an automobile
insurance policy pursuant to section 3101, the insurer shall send
documentary evidence of the deletion to the insured.
Sec. 3103. (1) An owner or registrant of a motorcycle shall
provide security against loss resulting from liability imposed by
law for property damage, bodily injury, or death suffered by a
person arising out of the ownership, operation, maintenance, or use
of that motorcycle. The security shall conform with the
requirements of section 3009(1).
(2)
Each insurer transacting insurance in this state which
that affords coverage for a motorcycle as described in subsection
(1) also shall offer, to an owner or registrant of a motorcycle,
security for the payment of first-party medical benefits only, in
increments of $5,000.00, payable in the event the owner or
registrant is involved in a motorcycle accident. An insurer
providing first-party medical benefits may offer, at appropriate
premium rates, deductibles, provisions for the coordination of
these benefits, and provisions for the subtraction of other
benefits provided or required to be provided under the laws of any
state or the federal government, subject to the prior approval of
the commissioner. These deductibles and provisions shall apply only
to benefits payable to the person named in the policy, the spouse
of the insured, and any relative of either domiciled in the same
household.
Sec. 3116. (1) A subtraction from personal protection
insurance benefits shall not be made because of the value of a
claim in tort based on the same accidental bodily injury.
(2) A subtraction from or reimbursement for personal
protection insurance benefits paid or payable under this chapter
shall be made only if recovery is realized upon a tort claim
arising from an accident occurring outside this state, a tort claim
brought within this state against the owner or operator of a motor
vehicle with respect to which the security required by section 3101
(3)
and (4) was not in effect, or a tort claim brought within
this
state based on intentionally caused harm to persons or property,
and shall be made only to the extent that the recovery realized by
the claimant is for damages for which the claimant has received or
would otherwise be entitled to receive personal protection
insurance benefits. A subtraction shall be made only to the extent
of the recovery, exclusive of reasonable attorneys' fees and other
reasonable expenses incurred in effecting the recovery. If personal
protection insurance benefits have already been received, the
claimant shall repay to the insurers out of the recovery a sum
equal to the benefits received, but not more than the recovery
exclusive of reasonable attorneys' fees and other reasonable
expenses incurred in effecting the recovery. The insurer shall have
a lien on the recovery to this extent. A recovery by an injured
person or his or her estate for loss suffered by the person shall
not be subtracted in calculating benefits due a dependent after the
death and a recovery by a dependent for loss suffered by the
dependent after the death shall not be subtracted in calculating
benefits due the injured person.
(3) A personal protection insurer with a right of
reimbursement under subsection (1), if suffering loss from
inability to collect reimbursement out of a payment received by a
claimant upon a tort claim is entitled to indemnity from a person
who, with notice of the insurer's interest, made the payment to the
claimant without making the claimant and the insurer joint payees
as their interests may appear or without obtaining the insurer's
consent to a different method of payment.
(4) A subtraction or reimbursement shall not be due the
claimant's insurer from that portion of any recovery to the extent
that recovery is realized for noneconomic loss as provided in
section
3135(1) and (2)(b) (3)(b)
or for allowable expenses, work
loss, and survivor's loss as defined in sections 3107 to 3110 in
excess of the amount recovered by the claimant from his or her
insurer.
Sec. 3135. (1) A person remains subject to tort liability for
noneconomic loss caused by his or her ownership, operation,
maintenance, or use of a motor vehicle only if the injured person
has suffered death, serious impairment of body function, or
permanent serious disfigurement.
(2) For a cause of action for damages pursuant to subsection
(1):
(a) If the cause of action for damages was filed on or after
July 26, 1996 but before July 1, 2005, all of the following apply:
(i) (a)
The issues of whether an injured person has suffered
serious impairment of body function or permanent serious
disfigurement are questions of law for the court if the court finds
either of the following:
(A) (i) There is no factual dispute concerning the nature
and
extent of the person's injuries.
(B) (ii) There is a factual dispute concerning the nature and
extent of the person's injuries, but the dispute is not material to
the determination as to whether the person has suffered a serious
impairment of body function or permanent serious disfigurement.
However, for a closed-head injury, a question of fact for the jury
is created if a licensed allopathic or osteopathic physician who
regularly diagnoses or treats closed-head injuries testifies under
oath that there may be a serious neurological injury.
(ii) (b)
Damages shall be assessed on the basis of
comparative fault, except that damages shall not be assessed in
favor of a party who is more than 50% at fault.
(iii) (c)
Damages shall not be assessed in favor of a party
who was operating his or her own vehicle at the time the injury
occurred and did not have in effect for that motor vehicle the
security required by section 3101 at the time the injury occurred.
(b) If the cause of action for damages was filed on or after
July 1, 2005, all of the following apply:
(i) The issues of whether an injured person has suffered
serious impairment of body function or permanent serious
disfigurement are questions of fact unless there is no genuine
issue as to any material fact concerning the nature, extent, and
effect of the person's injuries or impairments. If there is no
genuine issue as to any material fact concerning the nature,
extent, and effect of the person's injuries or impairments, the
issues of whether an injured person has suffered serious impairment
of body function or permanent serious disfigurement are questions
of law for the court.
(ii) Noneconomic damages shall be assessed on the basis of
comparative fault, except that noneconomic damages shall not be
assessed in favor of a plaintiff who is more than 50% at fault or
reduced in favor of a defendant who is more than 50% at fault.
(iii) Noneconomic damages shall not be assessed in favor of a
party who was operating a motor vehicle titled or registered in the
name of that party at the time the injury occurred if there was not
in effect for that motor vehicle the security required by section
3101 at the time the injury occurred.
(3) Notwithstanding any other provision of law, tort liability
arising from the ownership, operation, maintenance, or use within
this state of a motor vehicle with respect to which the security
required by section 3101 was in effect is abolished except as to:
(a) Intentionally
All damages arising out of
intentionally
caused harm to persons or property without regard to any tort
immunity for economic or noneconomic loss that would otherwise be
available under this act. Even though a person knows that harm to
persons or property is substantially certain to be caused by his or
her act or omission, the person does not cause or suffer that harm
intentionally if he or she acts or refrains from acting for the
purpose of averting injury to any person, including himself or
herself, or for the purpose of averting damage to tangible
property.
(b) Damages for noneconomic loss as provided and limited in
subsections (1) and (2).
(c) Damages for allowable expenses, work loss, and
survivor's
loss
as defined in sections 3107 to 3110 in excess of the daily,
monthly,
and 3-year limitations contained in those sections. All
damages for economic loss and loss of earning capacity that are not
compensable by sections 3107 to 3110. The party liable for damages
is entitled to an exemption reducing his or her liability by the
amount of taxes that would have been payable on account of income
the injured person would have received if he or she had not been
injured.
(d) Damages for economic loss by a nonresident in excess of
the personal protection insurance benefits provided under section
3163(4). Damages under this subdivision are not recoverable to the
extent that benefits covering the same loss are available from
other sources, regardless of the nature or number of benefit
sources available and regardless of the nature or form of the
benefits.
(e) Damages up to $500.00 to motor vehicles, to the extent
that the damages are not covered by insurance. An action for
damages pursuant to this subdivision shall be conducted in
compliance with subsection (4).
(4) In an action for damages pursuant to subsection (3)(e):
(a) Damages shall be assessed on the basis of comparative
fault, except that damages shall not be assessed in favor of a
party who is more than 50% at fault.
(b) Liability shall not be a component of residual liability,
as prescribed in section 3131, for which maintenance of security is
required by this act.
(5) Actions under subsection (3)(e) shall be commenced,
whenever legally possible, in the small claims division of the
district court or the municipal court. If the defendant or
plaintiff removes the action to a higher court and does not
prevail, the judge may assess costs.
(6) A decision of a court made pursuant to subsection (3)(e)
is not res judicata in any proceeding to determine any other
liability arising from the same circumstances as gave rise to the
action brought pursuant to subsection (3)(e).
(7) As used in this section, "serious impairment of body
function"
means an objectively manifested injury
or impairment of
involving
an important body function that affects the
person's
general
ability to lead his or her normal life or affected the
person's life in a manner, and for a time, that was not clearly
frivolous. The changes made in this subsection by the amendatory
act that added this sentence apply to any case pending on, or filed
on or after, July 22, 2004.
Sec. 3177. (1) An insurer obligated to pay personal protection
insurance benefits for accidental bodily injury to a person arising
out of the ownership, operation, maintenance, or use of an
uninsured
motor vehicle as a motor vehicle may recover such
benefits paid and appropriate loss adjustment costs incurred from
the owner or registrant of the uninsured motor vehicle or from his
or
her estate. Failure of such a the
person to make payment
within 30 days after judgment is a ground for suspension or
revocation of his or her motor vehicle registration and license as
defined
in section 25 of the Michigan vehicle code, Act No. 300 of
the
Public Acts of 1949, being section 257.25 of the Michigan
Compiled
Laws 1949 PA 300, MCL 257.25. An uninsured motor vehicle
for the purpose of this section is a motor vehicle with respect to
which
the security
is required
by sections 3101 and 3102 is not
in effect at the time of the accident.
(2) The motor vehicle registration and license shall not be
suspended or revoked and the motor vehicle registration and license
shall be restored if the debtor enters into a written agreement
with the secretary of state permitting the payment of the judgment
in installments, if the payment of any installments is not in
default.
(3) The secretary of state upon receipt of a certified
abstract of court record of a judgment or notice from the insurer
of an acknowledgment of debt shall notify the owner or registrant
of an uninsured vehicle of the provisions of subsection (1) at that
person's last recorded address with the secretary of state and
shall inform that person of the right to enter into a written
agreement with the secretary of state for the payment of the
judgment or debt in installments.
Enacting section 1. The changes made in section 3135(7) of the
insurance code of 1956, 1956 PA 218, MCL 500.3135, by this
amendatory act are curative and intended to correct the
misinterpretation of existing law and legislative intent that
occurred in the Michigan supreme court decision in Kreiner v
Fischer and Straub v Collette and Heil-Wylie, 471 Mich 109 (2004);
683 NW2d 611.