December 1, 2009, Introduced by Reps. Melton, Liss, Haugh, Gregory, Slavens, Kandrevas, Segal, Switalski, Geiss, Constan, Huckleberry, Robert Jones, Durhal, Cushingberry, Womack, Lemmons, Young, Nathan, Lisa Brown, Stanley, Roberts, Gonzales and Lipton and referred to the Committee on Insurance.
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending sections 3037 and 3135 (MCL 500.3037 and 500.3135),
section 3037 as amended by 1980 PA 461 and section 3135 as amended
by 2002 PA 697.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
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 pay for collision
damage to the insured vehicle without a deductible amount when 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 pay for
collision damage to the insured vehicle regardless of fault, with
deductibles in such amounts as may be approved by the commissioner,
which deductibles shall 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
subsection (1), standard and limited collision coverage may be
offered with deductibles as approved by the commissioner.
(3) Where the applicant is required by the insurer to sign the
written application form described in subsection (1), if the
applicant chooses to reject both of the collision coverages, or
limited collision without a deductible, offered under subsection
(1), the rejection shall be made in writing either on a separate
form or as part of the application, or some combination thereof, as
approved by the commissioner. The rejection statement shall inform
the
applicant of his or her rights in the event of damage to if the
insured vehicle is damaged under the alternative coverage option
selected.
(4)
In the case of For a written application made by mail, if
the applicant fails to sign or return a written rejection statement
as required by subsection (3), the requirements of subsection (3)
shall
be considered to have been are
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.
(5) At the time of the initial written application specified
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.
(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, 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 if the insured
vehicle is damaged under the current coverage.
(b) The collision coverages available under the policy and the
rights
of the insured in the event of damage to if the insured
vehicle is damaged under each collision option.
(c) Procedures for the policyholder to follow if he or she
wishes to change the current collision coverage.
(7) An insurer that pays collision damage under subsection (1)
or (2) on behalf of a party who was not substantially at fault in
the accident is subrogated to that party's right to recover those
damages under section 3135.
(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. 3135. (1) A person remains subject to tort liability for
noneconomic loss caused by his or her ownership, 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) filed on or after July 26, 1996, all of the following apply:
(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:
(i) There is no factual dispute concerning the nature and
extent of the person's injuries.
(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.
(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.
(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.
(3) Notwithstanding any other provision of law, tort liability
arising from the ownership, 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 caused harm to persons or property. 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. 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 impairment of an
important body function that affects the person's general ability
to lead his or her normal life.