May 24, 2007, Introduced by Reps. Constan, Johnson, Vagnozzi, Young, Meadows, Hammon, Hammel, Robert Jones, Scott, Clemente, Cushingberry, Polidori, Melton, Clack, Kathleen Law, Espinoza, Lemmons, Donigan and Condino and referred to the Committee on Insurance.
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
(MCL 500.100 to 500.8302) by adding section 3160.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 3160. (1) Each insurer authorized to transact automobile
insurance in this state shall offer, as optional coverages,
uninsured motorist benefits and underinsured motorist benefits. All
of the following apply to uninsured motorist benefits and
underinsured motorist benefits:
(a) The insurer shall inform any person purchasing insurance
from the insurer of that person's right to purchase coverage for
uninsured motorist benefits and underinsured motorist benefits and
shall submit to that person a written explanation and summary of
these coverages on a form approved by the commissioner. The insurer
shall also inform that person of the premiums that will be charged
for uninsured motorist benefits and underinsured motorist benefits.
If that person declines the offer to purchase uninsured motorist
benefits or underinsured motorist benefits, the insurer shall
procure, from that person, a written waiver of the option to
purchase uninsured motorist benefits or underinsured motorist
benefits, which waiver form must be approved by the commissioner.
(b) The minimum limits of coverage for uninsured motorist
benefits shall be $100,000.00 per person and $200,000.00 per
occurrence.
(c) The minimum limits of coverage for underinsured motorist
benefits shall be $100,000.00 per person and $200,000.00 per
occurrence.
(d) The coverages for uninsured motorist benefits and
underinsured motorist benefits shall be offered at rates that are
priced in accordance with standard insurance industry practices and
are otherwise reasonable and appropriate for the risk undertaken.
(e) The coverage required for uninsured motorist benefits and
underinsured motorist benefits shall be provided in an insurance
policy endorsement that is approved by the commissioner and is not
inconsistent or in conflict with this section.
(2) Any insurance policy endorsement providing uninsured
motorist benefits and underinsured motorist benefits shall comply
with all of the following:
(a) Coverage for uninsured motorist benefits entitles the
claimant to recover damages arising out of the ownership,
operation, maintenance, or use of a motor vehicle with respect to
which the security required by section 3101 or the security
required under the laws of another state with respect to that
vehicle, was not in effect at the time the damages occurred. The
damages recoverable by the claimant in the uninsured motorist claim
include the same elements of loss the claimant could have recovered
had he or she filed an action directly against the uninsured
tortfeasor. The claimant is entitled to pursue a claim for
uninsured motorist benefits even though a portion of the claimant's
damages or loss was caused by the conduct of other persons or
entities who were not uninsured tortfeasors.
(b) Coverage for underinsured motorist benefits entitles the
claimant to recover damages arising out of the ownership,
operation, maintenance, or use of a motor vehicle with respect to
which the security required by section 3101 or the security
required under the laws of another state with respect to that
vehicle, was in effect at the time the damages occurred but was in
an amount less than the total damages sought by the claimant in the
underinsured motorist claim. The damages recoverable by the
claimant in the underinsured motorist claim include the same
elements of loss the claimant could have recovered had he or she
filed an action directly against the underinsured tortfeasor. The
claimant is entitled to pursue a claim for underinsured motorist
benefits even though a portion of the claimant's damages or loss
was caused by the conduct of other persons or entities who were not
underinsured tortfeasors.
(c) For claims for underinsured motorist benefits, all of the
following apply:
(i) In order for the claimant to be entitled to pursue a claim
for underinsured motorist benefits, the claimant shall first
exhaust, by way of settlement or judgment, the limits of all
liability insurance coverages applicable to the underinsured
tortfeasor. Upon payment of those insurance limits, the claimant is
entitled to proceed with the claim for underinsured motorist
benefits.
(ii) A claimant is not required to obtain the consent of the
underinsured motorist insurer to settle with and fully release the
underinsured tortfeasor from all liability arising out of the
claim.
(iii) A claim for underinsured motorist benefits shall not be
reduced or set off by the amount paid to the claimant by the
underinsured motorist tortfeasor's liability insurers. However, any
amount paid personally by the underinsured tortfeasor to the
claimant may be subtracted or set off from the claimant's
underinsured motorist claim.
(d) A policy shall not contain notice provisions, claim
deadlines, or statutes of limitations that in any way shorten the
time limitations contained in the revised judicature act of 1961,
1961 PA 236, MCL 600.101 to 600.9947, that would be applicable if
the cause of action that gives rise to the claim for uninsured
motorist benefits or underinsured motorist benefits had been
asserted directly against the tortfeasors whose conduct gives rise
to the claim.
(e) The claim for uninsured motorist benefits and underinsured
motorist benefits shall not be reduced by any amounts paid or
payable to the claimant by any other sources, including, but not
limited to, personal protection insurance benefits under this act,
workers' compensation benefits, social security disability
benefits, social security survivor's benefits, health insurance,
disability insurance, benefits under private contract,
governmentally provided benefits, or damages recovered from any
tortfeasor, unless, in the uninsured motorist claim or the
underinsured motorist claim, the claimant seeks to recover damages
that duplicate amounts paid or payable to the claimant from any of
these other sources.
(f) A claim for uninsured motorist benefits or underinsured
motorist benefits shall not be denied or otherwise disallowed on
the basis that there was no physical contact between the claimant
or the claimant's vehicle and a vehicle that was uninsured or
underinsured within the meaning of this section, as long as the
claimant is otherwise able to prove, by a preponderance of the
evidence, that the claimant's damages arose out of the ownership,
operation, maintenance, or use of the uninsured or underinsured
vehicle.
(g) All insurance policies providing for uninsured motorist
benefits and underinsured motorist benefits shall give the claimant
the option of binding arbitration of the claim. If the claimant
selects arbitration, the arbitration shall be conducted in
accordance with chapter 50 of the revised judicature act of 1961,
1961 PA 236, MCL 600.5001 to 600.5035, and MCR 3.602.