Michigan Court of Appeals; Docket No. 77-2469; Published
Judges Bashara, Allen, and Kelly; Unanimous
Official Michigan Reporter Citation: 86 Mich App 473; Link to Opinion 
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Casualty Insurance Policies – Minimum Coverages and Required Provisions (MCL 500.3009)
CASE SUMMARY:
In a unanimous Opinion by Judge Allen, the Court of Appeals held that under the no-fault scheme driver exclusion provisions which excluded residual liability coverage for certain named drivers were permissible exclusions and accordingly an order by the Insurance Commissioner withdrawing approval of said exclusions was without authority.
The Court noted that MCLA 500.3009 expressly permits the exclusion from coverage of a named person and provides that the vehicle owner and others legally responsible for the excluded person remain fully and personally liable. This provision was adopted less than a year before the no-fault scheme was enacted. The Court further held mat no part of §3009 was expressly repealed by the no-fault statute and that §3009(1) was expressly referred to in §3103 of the no-fault act The Court further reasoned that the history of §3009 and the subsequent enactment of §3103 makes it difficult to accept the argument that §3009 was impliedly repealed by the passage of the no-fault statute.
The Court also rejected the public policy argument that such driver exclusions are inconsistent with the no-fault objective of compulsory insurance designed to provide prompt and adequate compensation to accident victims. The Court noted that these driver exclusion clauses are only an exclusion for residual liability and that personal protection insurance and property protection insurance are provided by the victim's own no-fault insurance policy. In addition, such exclusionary clauses are beneficial in reducing the cost of insurance for some automobile owners who have household members with poor driving records. Furthermore, the retention of personal liability in §3009(2) is an effective deterrent against unauthorized use of automobiles by excluded drivers.
