HB-4639, As Passed Senate, December 1, 2016

 

 

 

 

 

 

 

 

 

 

 

 

SENATE SUBSTITUTE FOR

 

HOUSE BILL NO. 4639

 

 

 

 

 

 

 

 

 

 

 

 

     A bill to amend 1956 PA 218, entitled

 

"The insurance code of 1956,"

 

by amending sections 3009, 3037, 3101, and 3113 (MCL 500.3009,

 

500.3037, 500.3101, and 500.3113), section 3009 as amended by 1988

 

PA 43, section 3037 as amended by 1980 PA 461, section 3101 as

 

amended by 2014 PA 492, and section 3113 as amended by 2014 PA 489,

 

and by adding section 3017.

 

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, 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 all of the following limits:

 

     (a) 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

 

     (b) Subject to that the limit for 1 person in subdivision (a),

 

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

 

     (c) 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 An exclusion shall under this

 

subsection 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) A liability policy described in subsection (1) may exclude

 

coverage for liability as provided in section 3017.

 

     (4) (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. 3017. (1) An authorized insurer that issues an insurance


policy insuring a personal vehicle may exclude all coverage

 

afforded under the policy for any loss or injury that occurs while

 

a transportation network company driver is logged on to a

 

transportation network company digital network or while a

 

transportation network company driver is providing a prearranged

 

ride. By way of example and not as limitation, all of the following

 

coverages may be excluded under this section:

 

     (a) Residual liability insurance required under sections 3009

 

and 3101.

 

     (b) Personal protection and property protection insurance

 

required under section 3101.

 

     (c) Uninsured and underinsured motorist coverage.

 

     (d) Comprehensive coverage.

 

     (e) Collision coverage, including coverage required to be

 

offered under section 3037.

 

     (2) This section does not require an automobile insurance

 

policy to provide coverage under any of the following

 

circumstances:

 

     (a) While a transportation network company driver is logged on

 

to a transportation network company digital network.

 

     (b) While a transportation network company driver is engaged

 

in providing a prearranged ride.

 

     (c) While a transportation network company driver otherwise

 

uses a vehicle to transport passengers for compensation.

 

     (3) This section does not preclude an insurer from providing

 

coverage for a transportation network company driver's personal

 

vehicle by contract or endorsement.


     (4) An insurer that excludes the coverage described in

 

subsection (1) does not have a duty to defend or indemnify for any

 

claim that is expressly excluded. This section does not invalidate

 

or limit an exclusion contained in a policy, including a policy in

 

use or approved for use in this state before the effective date of

 

this section, that excludes coverage for vehicles that are used to

 

carry individuals or property for a charge or that are available

 

for hire by the public. An insurer that defends or indemnifies for

 

a claim against a transportation network company driver who is

 

excluded under the terms of the policy has a right of contribution

 

against other insurers that provided automobile insurance to the

 

transportation network company driver in satisfaction of the

 

coverage requirements of section 23 of the limousine, taxicab, and

 

transportation network company act at the time of the loss.

 

     (5) An insurer that provides automobile insurance to a

 

transportation network company shall comply with section 23(5),

 

(6), and (9) of the limousine, taxicab, and transportation network

 

company act.

 

     (6) During an investigation of whether a claim is covered

 

under an insurance policy, a transportation network company and any

 

insurer that provides coverage under section 23 of the limousine,

 

taxicab, and transportation network company act shall cooperate to

 

facilitate the exchange of relevant information with persons who

 

are directly involved and any insurer of the transportation network

 

company driver. Relevant information required to be exchanged under

 

this subsection includes, but is not limited to, all of the

 

following:


     (a) The times that the transportation network company driver

 

logged on to and logged off of the transportation network company

 

digital network during the 12 hours preceding the accident and the

 

12 hours following the accident.

 

     (b) A clear description of the coverage, exclusions, and

 

limits under any insurance policy maintained as required by section

 

23 of the limousine, taxicab, and transportation network company

 

act.

 

     (7) As used in this section, all of the following terms mean

 

those terms as defined in section 2 of the limousine, taxicab, and

 

transportation network company act:

 

     (a) "Personal vehicle".

 

     (b) "Prearranged ride".

 

     (c) "Transportation network company".

 

     (d) "Transportation network company digital network".

 

     (e) "Transportation network company driver".

 

     Sec. 3037. (1) At the time a new applicant for the insurance

 

required by section 3101 for a private passenger nonfleet

 

automobile makes an initial written application to the insurer, an

 

insurer shall offer both of the following collision coverages to

 

the applicant:

 

     (a) Limited collision coverage, which shall must pay for

 

collision damage to the insured vehicle without a deductible amount

 

when if the operator of the vehicle is not substantially at fault

 

in the accident from which the damage arose.

 

     (b) Broad form collision coverage, which shall must pay for

 

collision damage to the insured vehicle regardless of fault, with


deductibles in such the amounts as may be approved by the

 

commissioner, director, which deductibles shall must be waived if

 

the operator of the vehicle is not substantially at fault in the

 

accident from which the damage arose.

 

     (2) In addition to the coverages offered pursuant to under

 

subsection (1), standard and limited collision coverage may be

 

offered with deductibles as approved by the commissioner.director.

 

     (3) An insurer may limit collision coverage offered under this

 

section as provided in section 3017.

 

     (4) (3) Where If the applicant is required by the insurer to

 

sign the written application form described in subsection (1), and

 

if the applicant chooses to reject both of the collision coverages,

 

or limited collision without a deductible, offered under subsection

 

(1), the rejection shall must be made in writing, either on a

 

separate form, or as part of the application, or in some

 

combination thereof, of these, as approved by the commissioner.

 

director. The rejection statement shall must inform the applicant

 

of his or her rights in the event of if there is damage to the

 

insured vehicle under the alternative coverage option selected.

 

     (5) (4) In the case of If a written application is made by

 

mail, and if the applicant fails to sign or return a written

 

rejection statement as required by subsection (3), (4), the

 

requirements of subsection (3) shall be (4) are considered to have

 

been be satisfied with respect to the insurer if all of the

 

following occur:

 

     (a) The application provides the applicant with an opportunity

 

to select the coverages required to be offered under subsection


(1).

 

     (b) The applicant is requested to sign the rejection

 

statement, either as part of the application or as a separate form

 

issued with the application, if the applicant fails to select

 

either of the coverages specified in subsection (1).

 

     (c) The applicant signed the application as otherwise required

 

by the insurer.

 

     (6) (5) At the time of the initial written application

 

specified described in subsection (1), an agent or insurer shall

 

provide the applicant with a written explanation of collision

 

coverage options in easily understandable language, if that

 

information is not contained in the application form.

 

     (7) (6) At least annually in conjunction with the renewal of a

 

private passenger nonfleet automobile insurance policy, or at the

 

time of an addition, deletion, or substitution of a vehicle under

 

an existing policy, other than a group policy, an insurer shall

 

inform the policyholder, on a form approved by the commissioner,

 

director, of all of the following:

 

     (a) The current status of collision coverage, if any, for the

 

vehicle or vehicles affected by the renewal or change and the

 

rights of the insured in the event of damages to the insured

 

vehicle under the current coverage if the vehicle is damaged.

 

     (b) The collision coverages available under the policy and the

 

rights of the insured in the event of damage to the insured vehicle

 

under each collision option if the vehicle is damaged.

 

     (c) Procedures for the policyholder to follow if he or she

 

wishes to change the current collision coverage.


     (8) (7) As used in this section:

 

     (a) "Collision damage" does not include losses customarily

 

insured under comprehensive coverages.

 

     (b) "Substantially at fault" means a person's action or

 

inaction was more than 50% of the cause of the accident.

 

     (8) This section shall take effect March 1, 1980.

 

     Sec. 3101. (1) The owner or registrant of a motor vehicle

 

required to be registered in this state shall maintain security for

 

payment of benefits under personal protection insurance, property

 

protection insurance, and residual liability insurance. Security is

 

only required to be in effect during the period the motor vehicle

 

is driven or moved on a highway. Notwithstanding any other

 

provision in this act, an insurer that has issued an automobile

 

insurance policy on a motor vehicle that is not driven or moved on

 

a highway may allow the insured owner or registrant of the motor

 

vehicle to delete a portion of the coverages under the policy and

 

maintain the comprehensive coverage portion of the policy in

 

effect.

 

     (2) As used in this chapter:

 

     (a) "Automobile insurance" means that term as defined in

 

section 2102.

 

     (b) "Commercial quadricycle" means a vehicle to which all of

 

the following apply:

 

     (i) The vehicle has fully operative pedals for propulsion

 

entirely by human power.

 

     (ii) The vehicle has at least 4 wheels and is operated in a

 

manner similar to a bicycle.


     (iii) The vehicle has at least 6 seats for passengers.

 

     (iv) The vehicle is designed to be occupied by a driver and

 

powered either by passengers providing pedal power to the drive

 

train of the vehicle or by a motor capable of propelling the

 

vehicle in the absence of human power.

 

     (v) The vehicle is used for commercial purposes.

 

     (vi) The vehicle is operated by the owner of the vehicle or an

 

employee of the owner of the vehicle.

 

     (c) "Golf cart" means a vehicle designed for transportation

 

while playing the game of golf.

 

     (d) "Highway" means highway or street as that term is defined

 

in section 20 of the Michigan vehicle code, 1949 PA 300, MCL

 

257.20.

 

     (e) "Moped" means that term as defined in section 32b of the

 

Michigan vehicle code, 1949 PA 300, MCL 257.32b.

 

     (f) "Motorcycle" means a vehicle that has a saddle or seat for

 

the use of the rider, is designed to travel on not more than 3

 

wheels in contact with the ground, and is equipped with a motor

 

that exceeds 50 cubic centimeters piston displacement. For purposes

 

of this subdivision, the wheels on any attachment to the vehicle

 

are not considered as wheels in contact with the ground. Motorcycle

 

does not include a moped or an ORV.

 

     (g) "Motorcycle accident" means a loss that involves the

 

ownership, operation, maintenance, or use of a motorcycle as a

 

motorcycle, but does not involve the ownership, operation,

 

maintenance, or use of a motor vehicle as a motor vehicle.

 

     (h) "Motor vehicle" means a vehicle, including a trailer, that


is operated or designed for operation on a public highway by power

 

other than muscular power and has more than 2 wheels. Motor vehicle

 

does not include any of the following:

 

     (i) A motorcycle.

 

     (ii) A moped.

 

     (iii) A farm tractor or other implement of husbandry that is

 

not subject to the registration requirements of the Michigan

 

vehicle code under section 216 of the Michigan vehicle code, 1949

 

PA 300, MCL 257.216.

 

     (iv) An ORV.

 

     (v) A golf cart.

 

     (vi) A power-driven mobility device.

 

     (vii) A commercial quadricycle.

 

     (i) "Motor vehicle accident" means a loss that involves the

 

ownership, operation, maintenance, or use of a motor vehicle as a

 

motor vehicle regardless of whether the accident also involves the

 

ownership, operation, maintenance, or use of a motorcycle as a

 

motorcycle.

 

     (j) "ORV" means a motor-driven recreation vehicle designed for

 

off-road use and capable of cross-country travel without benefit of

 

road or trail, on or immediately over land, snow, ice, marsh,

 

swampland, or other natural terrain. ORV includes, but is not

 

limited to, a multitrack or multiwheel drive vehicle, a motorcycle

 

or related 2-wheel, 3-wheel, or 4-wheel vehicle, an amphibious

 

machine, a ground effect air cushion vehicle, an ATV as defined in

 

section 81101 of the natural resources and environmental protection

 

act, 1994 PA 451, MCL 324.81101, or other means of transportation


deriving motive power from a source other than muscle or wind. ORV

 

does not include a vehicle described in this subdivision that is

 

registered for use upon on a public highway and has the security

 

described in section 3101 required under subsection (1) or section

 

3103 in effect.

 

     (k) "Owner" means any of the following:

 

     (i) A person renting a motor vehicle or having the use of a

 

motor vehicle, under a lease or otherwise, for a period that is

 

greater than 30 days.

 

     (ii) A person renting a motorcycle or having the use of a

 

motorcycle under a lease for a period that is greater than 30 days,

 

or otherwise for a period that is greater than 30 consecutive days.

 

A person who borrows a motorcycle for a period that is less than 30

 

consecutive days with the consent of the owner is not an owner

 

under this subparagraph.

 

     (iii) A person that holds the legal title to a motor vehicle

 

or motorcycle, other than a person engaged in the business of

 

leasing motor vehicles or motorcycles that is the lessor of a motor

 

vehicle or motorcycle under a lease that provides for the use of

 

the motor vehicle or motorcycle by the lessee for a period that is

 

greater than 30 days.

 

     (iv) A person that has the immediate right of possession of a

 

motor vehicle or motorcycle under an installment sale contract.

 

     (l) "Power-driven mobility device" means a wheelchair or other

 

mobility device powered by a battery, fuel, or other engine and

 

designed to be used by an individual with a mobility disability for

 

the purpose of locomotion.


     (m) "Registrant" does not include a person engaged in the

 

business of leasing motor vehicles or motorcycles that is the

 

lessor of a motor vehicle or motorcycle under a lease that provides

 

for the use of the motor vehicle or motorcycle by the lessee for a

 

period that is longer than 30 days.

 

     (3) Security required by subsection (1) may be provided under

 

a policy issued by an authorized insurer that affords insurance for

 

the payment of benefits described in subsection (1). A policy of

 

insurance represented or sold as providing security is considered

 

to provide insurance for the payment of the benefits.

 

     (4) Security required by subsection (1) may be provided by any

 

other method approved by the secretary of state as affording

 

security equivalent to that afforded by a policy of insurance, if

 

proof of the security is filed and continuously maintained with the

 

secretary of state throughout the period the motor vehicle is

 

driven or moved on a highway. The person filing the security has

 

all the obligations and rights of an insurer under this chapter.

 

When the context permits, "insurer" as used in this chapter,

 

includes a person that files the security as provided in this

 

section.

 

     (5) An insurer that issues a policy that provides the security

 

required under subsection (1) may exclude coverage under the policy

 

as provided in section 3017.

 

     Sec. 3113. A person is not entitled to be paid personal

 

protection insurance benefits for accidental bodily injury if at

 

the time of the accident any of the following circumstances

 

existed:


     (a) The person was willingly operating or willingly using a

 

motor vehicle or motorcycle that was taken unlawfully, and the

 

person knew or should have known that the motor vehicle or

 

motorcycle was taken unlawfully.

 

     (b) The person was the owner or registrant of a motor vehicle

 

or motorcycle involved in the accident with respect to which the

 

security required by section 3101 or 3103 was not in effect.

 

     (c) The person was not a resident of this state, was an

 

occupant of a motor vehicle or motorcycle not registered in this

 

state, and the motor vehicle or motorcycle was not insured by an

 

insurer that has filed a certification in compliance with section

 

3163.

 

     (d) The person was operating a motor vehicle or motorcycle as

 

to which he or she was named as an excluded operator as allowed

 

under section 3009(2).

 

     (e) The person was the owner or operator of a motor vehicle

 

for which coverage was excluded under a policy exclusion authorized

 

under section 3017.

 

     Enacting section 1. This amendatory act takes effect 90 days

 

after the date it is enacted into law.

 

     Enacting section 2. This amendatory act does not take effect

 

unless all of the following bills of the 98th Legislature are

 

enacted into law:

 

     (a) House Bill No. 4637.

 

     (b) House Bill No. 4640.

 

     (c) House Bill No. 4641.

 

     (d) Senate Bill No. 392.