The Michigan Court of Appeals published decision in Memberselect Insurance Company v Partipilo addressed whether a household exclusion provision in a no-fault automobile insurance policy’s bodily-injury liability coverage. Relying upon MCL 500.3009, as well as Progressive Marathon Ins Co v Espinoza-Solis (2024), the Memberselect Court found coverage limited to $250,000.
The decedents, husband and wife, were killed in an automobile accident. The wife’s estate filed a wrongful-death and bodily injury action against the other involved driver and the husband’s estate. The declaration certificate of decedents’ auto insurance policy with Memberselect stated the bodily injury liability limits as $250,000 per person and $500,000 per accident. The policy included an exclusion for damages exceeding the minimum limit. This limit was mandated by Michigan’s motor vehicle financial responsibility law.
Memberselect filed a declaratory judgment action arguing its policy’s exclusion applied to the wife’s estate’s claims against her husband’s estate. Memberselect argued that the “minimum limit” was $50,000. They claimed that applying the exclusion limited the wife’s estate’s claim to that amount. The wife’s estate countered that the decedents had completed a form to elect lower limits. As a result, the minimum liability limit was $250,000/$500,000. The Circuit Court agreed with the decedents. It found that the statute requires a minimum limit of $250,000/$500,000 when the necessary form is completed.
The Court of Appeals analogized this case to Progressive. In that case, the Circuit Court concluded that Progressive was liable for the statutory minimum of $250,000/$500,000 despite the noncooperation of its insured. The Progressive Court found that MCL 500.3009 is clear. The $250,000/$500,000 limits apply by default and are mandatory for all no-fault policies issued after July 1, 2020. The exception applies only if it is established that an effective election of a lower limit was made pursuant to MCL 500.3009(5).
The Memberselect Court agreed with the Progressive Court’s reasoning. The Court found that “…the statutorily required minimum residual liability insurance for policies issued after July 1, 2020, is $250,000 per person and $500,000 per accident, pursuant to MCL 500.3009(1)(a) and (b), unless the proper steps are followed to exercise the option of selecting a lower coverage amount under MCL 500.3009(5).” Because the decedents in this case did not opt for a lower coverage amount, the liability limits are $250,000/$500,000.
