ONLY NEW POLICIES ISSUED OR DELIVERED AFTER JULY 1, 2020 TRIGGER HIGHER LIABILITY LIMITS

Cloie Y. Chidiac

The No-Fault overhaul known as Public Acts 21 and 22 created a default liability insurance limit of $250,000 per person/$500,000 per accident for policies issued after July 1, 2020. Specifically MCL 500.3009(1) states that after July 1, 2020, policies “must not be delivered or issued for delivery without containing the following: “a limit, exclusive of interest and costs, of not less than $250,000.00 because of bodily injury to or death of 1 person in any 1 accident;” or “a limit of not less than $500,000.00 because of bodily injury to or death of 2 or more persons in any 1 accident.”

The central issue in the recent decision of Bonter, et al v Progressive Marathon Ins Co, et al, unpublished opinion per curiam of the Court of Appeals, decided August 17, 2023 (Docket No. 360411) revolved around whether the minimum liability coverage limits stated in Progressive’s policy were automatically increased under Public Acts 21 and 22. The trial court held that they were, but Progressive disagreed. This appeal sought to clarify this matter.

Progressive issued a No-Fault automobile policy to Taylon Williams on June 19, 2020, with coverage effective from June 20, 2020 to December 20, 2020. The policy was issued with liability coverage limits of $20,000 per person or $40,000 per accident.

On July 6, 2020, Williams requested that Progressive change the insured vehicle under the policy from a 2014 Jeep Grand Cherokee to a 2017 Dodge Charger. Progressive did so, and sent Williams an “auto insurance coverage summary” reflecting this change. On July 22, 2020, Progressive sent an additional insurance coverage summary reflecting that a credit union had been added as an interest-holder on the vehicle.

On July 25, 2020, Williams, while driving the 2017 Dodge Charger, was involved in an accident with Plaintiffs-Appellees Bonter and Jackman, resulting in their injuries. The dispute then arose regarding the extent of Progressive’s liability under Williams’ policy. The trial court determined that the change in insured vehicles on July 6, 2020, along with Progressive’s sending of the insurance coverage summary, fulfilled the statutory conditions to impose the higher liability limits mandated by the amendments. Consequently, it denied Progressive’s motion for summary disposition and granted summary disposition in favor of Bonter and Jackman.

The Court of Appeals applied the relevant statute, MCL 500.3009(1), and the recently published decision of Progressive Marathon Ins Co v Pena, noting the Pena Court had determined that the increased liability limits applied only to policies delivered or issued for delivery after July 1, 2020, and not to policies already in existence.

In applying the Pena decision to this case, the Court of Appeals concluded that Williams’ policy limits did not automatically increase on July 2, 2020, because the policy was not delivered or issued for delivery after that date. Progressive had proffered evidence that it sent Williams a policy on June 19, 2020, and the subsequent “auto insurance coverage summaries” all referenced the same policy number and indicated that they were not, by themselves, new policies. The change in insured vehicles on July 6, 2020 did not constitute the issuance or renewal of the policy either. Therefore, the Court of Appeals held that MCL 500.3009(8), which would have triggered the increased limits, did not apply, and Progressive was entitled to summary disposition.