July 2, 2003, Introduced by Reps. Howell, LaSata, Julian, Lipsey and Adamini and referred to the Committee on Insurance.
A bill to amend 1949 PA 300, entitled
"Michigan vehicle code,"
by amending sections 45, 401, 514, and 520 (MCL 257.45, 257.401,
257.514, and 257.520), section 401 as amended by 2002 PA 652.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
1 Sec. 45. "Proof of financial responsibility" means proof of
2 ability to respond in
damages for liability , on account of for
3 accidents occurring subsequent
to after the effective date of
4 the proof , arising
out of the ownership, maintenance, or use
5 of a motor vehicle ,
in the amount of $20,000.00 $75,000.00
6 because of bodily injury
to or death of 1 person in any one 1
7 accident, and, subject to
said that limit for 1 person, in the
8 amount of $40,000.00 $150,000.00
because of bodily injury to or
9 death of 2 or more
persons in any one 1 accident, and in the
10 amount of $10,000.00 because of injury to or destruction of
1 property of others in any
one 1 accident.
2 Sec. 401. (1) This section shall not be construed to limit
3 the right of a person to bring a civil action for damages for
4 injuries to either person or property resulting from a violation
5 of this act by the owner or operator of a motor vehicle or his or
6 her agent or servant. The owner of a motor vehicle is liable for
7 an injury caused by the negligent operation of the motor vehicle
8 whether the negligence consists of a violation of a statute of
9 this state or the ordinary care standard required by common law.
10 The owner is not liable unless the motor vehicle is being driven
11 with his or her express or implied consent or knowledge. It is
12 presumed that the motor vehicle is being driven with the
13 knowledge and consent of the owner if it is driven at the time of
14 the injury by his or her spouse, father, mother, brother, sister,
15 son, daughter, or other immediate member of the family.
16 (2) A person engaged in the business of leasing motor
17 vehicles who is the lessor of a motor vehicle under a lease
18 providing for the use of the motor vehicle by the lessee for a
19 period that is greater than 30 days, or a dealer acting as agent
20 for that lessor, is not liable at common law for damages for
21 injuries to either person or property resulting from the
22 operation of the leased motor vehicle, including damages
23 occurring after the expiration of the lease if the vehicle is in
24 the possession of the lessee.
25 (3) Notwithstanding subsection (1), a person engaged in the
26 business of leasing motor vehicles who is the lessor of a motor
27 vehicle under a lease providing for the use of the motor vehicle
1 by the lessee for a period of 30 days or less is liable for an
2 injury caused by the negligent operation of the leased motor
3 vehicle only if the injury occurred while the leased motor
4 vehicle was being operated by an authorized driver under the
5 lease agreement or by the lessee's spouse, father, mother,
6 brother, sister, son, daughter, or other immediate family
7 member. Unless the lessor, or his or her agent, was negligent in
8 the leasing of the motor vehicle, the lessor's liability under
9 this subsection is
limited to $20,000.00 $75,000.00 because of
10 bodily injury to or death of 1 person in any 1 accident and
11 $40,000.00 $150,000.00 because of bodily injury to or
death of
12 2 or more persons in any 1 accident.
13 (4) A person engaged in the business of leasing motor
14 vehicles as provided under subsection (3) shall notify a lessee
15 that the lessor is liable only up to the maximum amounts provided
16 for in subsection (3), and only if the leased motor vehicle was
17 being operated by the lessee or other authorized driver or by the
18 lessee's spouse, father, mother, brother, sister, son, daughter,
19 or other immediate family member, and that the lessee may be
20 liable to the lessor up to amounts provided for in subsection
21 (3), and to an injured person for amounts awarded in excess of
22 the maximum amounts provided for in subsection (3).
23 (5) Subsections (3) and (4) shall not be construed to expand
24 or reduce, except as otherwise provided by this act, the
25 liability of a person engaged in the business of leasing motor
26 vehicles or to impair that person's right to indemnity or
27 contribution, or both.
1 (6) As used in subsections (3), (4), and (5), "motor vehicle"
2 means a self-propelled device by which a person or property may
3 be transported upon a public highway. Motor vehicle does not
4 include a bus, power shovel, road machinery, agricultural
5 machinery, or other machinery or vehicle not designed primarily
6 for highway transportation. Motor vehicle also does not include
7 a device that moves upon or is guided by a track.
8 (7) A lessee in possession of an off lease vehicle, and not
9 the dealer of the vehicle, is liable as the owner of the vehicle
10 for any damages awarded for an injury to a person or property
11 resulting from the operation of the vehicle. The dealer of an
12 off lease vehicle may be liable at common law for damages awarded
13 for an injury to a person or property resulting from the
14 operation of the vehicle only if the dealer is in possession of
15 the vehicle and the certificate of title and has acknowledged
16 possession of the certificate of title to the lessor.
17 Sec. 514. Judgments
herein referred to, shall, for the
18 purpose of this chapter
only, be deemed are considered
19 satisfied as follows:
20 (a) 1.
When $20,000.00 If $75,000.00 is credited upon any
21 judgment or judgments rendered in excess of that amount because
22 of bodily injury to or death of 1 person as the result of any
23 one 1 accident. ; or
24 (b) 2.
When, If subject to such limit of $20,000.00
25 $75,000.00 because of bodily injury to or death of 1 person, the
26 sum of $40,000.00 $150,000.00
is credited upon any judgment or
27 judgments rendered in excess of that amount because of bodily
1 injury to or death of 2 or more persons as the result of any
2 one 1 accident. ; or
3 (c) 3.
When If $10,000.00 is credited upon any judgment or
4 judgments rendered in excess of that amount because of injury to
5 or destruction of
property of others as a result of any one 1
6 accident.
7 Sec. 520. (1)
(a) A As used in this chapter, "motor
8 vehicle liability
policy" as used in this chapter, shall mean
9 means an owner's or an operator's policy of liability insurance,
10 certified as provided in section 518 or section 519 as proof of
11 financial responsibility, and issued, except as otherwise
12 provided in section 519, by an insurance carrier duly authorized
13 to transact business in this state, to or for the benefit of the
14 person named therein
as in the policy as the insured.
15 (2) (b)
Such An owner's policy of liability insurance shall
16 provide for all of the following:
17 (a) (1) Shall
designate by explicit description or by
18 appropriate reference all motor vehicles with respect to which
19 coverage is thereby
to be granted. ; and
20 (b) (2) Shall
insure the person named therein in the
21 policy and any other person, as insured, using any such motor
22 vehicle or motor vehicles with the express or implied permission
23 of such the
named insured, against loss from the liability
24 imposed by law for damages arising out of the ownership,
25 maintenance, or use of such motor vehicle or motor vehicles
26 within the United States of America or the Dominion of Canada,
27 subject to limits exclusive of interest and costs, with respect
1 to each such motor
vehicle, as follows: $20,000.00 $75,000.00
2 because of bodily injury to or death of 1 person in any 1
3 accident and, subject to said
that limit for 1 person,
4 $40,000.00 $150,000.00 because of bodily injury to or
death of
5 2 or more persons in any 1 accident, and $10,000.00 because of
6 injury to or destruction of property of others in any 1 accident.
7 ;
8 (c) (3)
When If a certificate is filed showing that a
9 policy or policies have been issued covering all motor vehicles
10 owned by the insured but not insuring such person when operating
11 any motor vehicle not
owned by him or her, it shall be unlawful
12 for such that person to shall not
operate any motor vehicle
13 not owned by him or
her or not covered by such the
14 certificate.
15 (3) (c)
Such An operator's policy of liability insurance
16 shall insure the person
named as insured therein in the policy
17 against loss from the liability imposed upon him or her by law
18 for damages arising out of the use by him or her of any motor
19 vehicle not owned by him or her, within the same territorial
20 limits and subject to the
same limits of liability as are set
21 forth above provided in subsection (2) with respect to an
22 owner's policy of liability insurance.
23 (4) (d)
Such A motor vehicle liability policy shall state
24 the name and address of the named insured, the coverage afforded
25 by the policy, the policy period, and the limits of liability,
26 and shall contain an agreement or be indorsed that insurance is
27 provided thereunder in
the policy in accordance with the
1 coverage defined in this chapter as respects bodily injury and
2 death or property damage, or both, and is subject to all the
3 provisions of this chapter.
4 (5) (e)
Such A motor vehicle liability policy need not
5 insure any liability
under any workmen's worker's compensation
6 law nor or
any liability on account of bodily injury to or
7 death of an employee of the insured while engaged in the
8 employment, other than domestic, of the insured, or while engaged
9 in the operation, maintenance, or repair of any such motor
10 vehicle nor or
any liability for damage to property owned by,
11 rented to, in charge of, or transported by the insured.
12 (6) (f) Every
motor vehicle liability policy shall be is
13 subject to the following provisions which need not be contained
14 therein in the policy:
15 (a) (1) The
liability of the insurance carrier with respect
16 to the insurance required by this chapter shall become absolute
17 whenever injury or damage
covered by said the motor vehicle
18 liability policy occurs; said
the policy may not be cancelled
19 canceled or annulled as
to such this liability by any agreement
20 between the insurance carrier and the insured after the
21 occurrence of the injury or damage; no statement made by the
22 insured or on his or
her behalf and no violation of said the
23 policy shall defeat or
void said the policy, and except as
24 hereinafter provided, no fraud, misrepresentation, assumption of
25 liability, or other act of the insured in obtaining or retaining
26 such the policy, or in adjusting a claim under such
the
27 policy, and no failure of the insured to give any notice, forward
1 any paper, or otherwise cooperate with the insurance carrier,
2 shall constitute a
defense as against such a judgment
3 creditor.
4 (b) (2) The
satisfaction by the insured of a judgment for
5 such injury or damage shall is not be a
condition precedent
6 to the right or duty of the insurance carrier to make payment on
7 account of such injury or damage.
8 (c) (3) If
any person shall secure secures final judgment
9 against the insured for loss or damage covered by any such policy
10 and if such the
judgment is not satisfied within 30 days after
11 it shall have become becomes
final, then such the judgment
12 creditor shall be is
entitled to recover under the terms of
13 such the policy in the same manner and to the same
extent as
14 the insured, except as hereinafter provided.
15 (d) (4) The
insurance carrier shall have has the right to
16 settle any claim covered
by the policy, and if such a
17 settlement is made in
good faith, the amount thereof of the
18 settlement shall be deductible from the limits of liability
19 specified in
subparagraph (2) of paragraph (b) of this section
20 under subsection (2)(b).
21 (e) (5) The
policy, the written application therefor for
22 the policy, if any, and
any rider or indorsement which that
23 does not conflict with the provisions of this chapter, shall
24 constitute the entire contract between the parties.
25 (f) (6) The
insurance carrier shall is not be liable on
26 any judgment if it has not had prompt notice of and reasonable
27 opportunity to appear in
and defend the action in which such
1 the judgment was rendered, or if the judgment has been obtained
2 through collusion between the judgment creditor and the insured.
3 (7) (g) Any
policy which that grants the coverage
4 required for a motor vehicle liability policy may also grant any
5 lawful coverage in excess of or in addition to the coverage
6 specified for a motor vehicle liability policy and such excess or
7 additional coverage shall
is not be subject to the provisions
8 of this chapter. With
respect to a policy which that grants
9 such excess or additional coverage, the term
"motor vehicle
10 liability policy" shall apply only to that part of the coverage
11 which that is required by this section.
12 (8) (h) Any
motor vehicle liability policy may provide that
13 the insured shall reimburse the insurance carrier for any payment
14 the insurance carrier would not have been obligated to make under
15 the terms of the policy except for the provisions of this
16 chapter.
17 (9) (i) Any
motor vehicle liability policy may provide for
18 the prorating of the
insurance thereunder under the policy with
19 other valid and collectible insurance.
20 (10) (j) The
requirements for a motor vehicle liability
21 policy may be fulfilled by the policies of 1 or more insurance
22 carriers which policies together meet such requirements.
23 (11) (k) Any
carrier authorized to issue motor vehicle
24 liability policies may, pending the issuance of such a policy,
25 execute an agreement, to be known as a "binder", or may, in lieu
26 of such a policy, issue an indorsement to an existing policy.
27 Every such binder
or indorsement shall be is subject to the
1 provisions of this section and shall be construed to provide
2 indemnity or insurance in like manner and to the same extent as a
3 motor vehicle liability policy.
4 Enacting section 1. This amendatory act takes effect
5 July 1, 2003.