Michigan Court of Appeals; Docket #222114; Unpublished
Judges Fitzgerald, Bandstra and Kelly; unanimous; per curiam
Official Michigan Reporter Citation: Not applicable, Link to Opinion 
STATUTORY INDEXING:
General / Miscellaneous [3101]
TOPICAL INDEXING:
Not applicable
CASE SUMMARY:
In this unanimous unpublished per curiam opinion, the Court of Appeals held that an automobile lease agreement permitting the lessee to elect whether the lessee’s insurance policy or the vehicle owner’s insurance policy would provide primary liability coverage for the leased vehicle, violated the provisions of the Michigan No-Fault Law by impermissibly shifting the responsibility to insure a vehicle from the owner to a permissive user. Citing the Supreme Court’s decision in Citizens Insurance Company v Federated Mutual Insurance Company [Item No. 1758], the court stated, “The ‘dominant principle’ underlying the no-fault act is that the cost of injuries arising from the permissive use or operation of a particular vehicle should be born by the owners and their insurers. This legislative mandate is not served by permitting drivers to ‘unilaterally dictate the priority of coverage among insurers in a manner that shifts insurance costs to the nonowner of the vehicle.’” Therefore, car rental companies and their insurers are required to provide primary residual liability coverage for the permissive use of the rental cars up to their policy limits with a minimum required by statute.
The court also held that the Certificate of Insurance which had been issued by the lessee’s independent insurance agent could not alter the terms of the insurance policy that had been issued by plaintiff Auto-Owners to the lessee for the reason that the agent was not an agent of plaintiff Auto-Owners and plaintiff Auto-Owners had not committed any act creating an ostensible agency. Therefore, the terms of the Certificate of Insurance could not create coverage that did not exist under the insurance policy.
