SB 1140 adds an additional exclusion to coverage under Michigan no-fault law: those who steal or knowingly use a stolen vehicle cannot access no-fault PIP benefits
Auto no-fault reform was a hot topic during the Michigan Legislature’s lame-duck session. However, SB 1140 was the only bill the Legislature passed affecting the Michigan No-Fault Act. Pending Governor Snyder’s expected signature within the next week or so, SB 1140 takes immediate effect and ultimately expands the scope of individuals who can be disqualified from no-fault benefits under MCL 500.3113.
Specifically, SB 1140 amends MCL 500.3113(a) to disqualify any person who “was willingly operating or willingly using a motor vehicle or motorcycle that was taken unlawfully, and the person knew or should have known that the motor vehicle or motorcycle was taken unlawfully.” Under the prior version of MCL 500.3113(a), a person was only disqualified from no-fault benefits, if the person “was using a motor vehicle or motorcycle which he or she had taken unlawfully.” In other words, the old version of MCL 500.3113(a) only disqualified the carjacker from no-fault benefits, whereas the amended version now disqualifies the carjacker and any other person who uses the vehicle and knows or should know the vehicle was taken unlawfully.
Furthermore, SB 1140 adds subsection (d) to MCL 500.3113. This new subsection disqualifies a person from no-fault benefits who “was operating a motor vehicle or motorcycle as to which he or she was a named as an excluded operator as allowed under [MCL 500.3009(1)].” In order to avoid this disqualification, families will need to be extra vigilant to make sure they know who is listed as an excluded driver on their insurance policy and forbid any excluded person from using the household vehicles or motorcycles.
It is questionable whether SB 1140 is good public policy, as Lansing car accident lawyer Steve Sinas points out:
Unfortunately, more people injured in auto accidents and their medical providers will be prevented from recovering no-fault benefits under SB 1140. However, from a principled standpoint, it is hard to argue that the right to no-fault benefits should be preserved for a person who knowingly uses a stolen vehicle, or for a person who uses a vehicle despite being explicitly excluded from insurance coverage on that particular vehicle.
Our car accident attorneys have decades of collective experience handling the many claims that can arise under Michigan auto no-fault law. Learn about how we can help you by contacting our Lansing or Grand Rapids law offices for a free consultation.