State Farm Mutual Automobile Insurance v. Shelly

231 N.W.2d 641, 394 Mich. 448, 1975 Mich. LEXIS 245

• Court: Michigan Supreme Court
• Decided: July 23, 1975
• Docket: Docket 56846
• Status: Published

Opinion

Memorandum Opinion. On order of the Court, plaintiff-appellant’s application for leave to appeal is considered and the same is hereby granted.

The Court, sua sponte, pursuant to GCR 1963, 865.1(7), hereby reverses that portion of the decision of the Court of Appeals relating to the extent of the insurance company’s liability where an exclusionary clause in a policy of motor vehicle liability insurance is void because it is against the policy of the Motor Vehicle Accident Claims Act (MV ACA).

Under the MV AC A, a motor vehicle could be registered as an insured vehicle on the strength of a certificate of insurance certifying that a policy of insurance had been issued covering the vehicle in compliance with the MV ACA. Exclusions which purported to limit coverage below that required so that the vehicle would not be an "uninsured motor vehicle” within the meaning of the MVAC A were invalid.

The question is whether the insurance company’s liability as to the reinstated coverage is limited to the amount required by the statute or extends to the full, and greater, amount set forth in the policy.

We have considered decision in other jurisdictions and the opinion of the Court of Appeals reported at 59 Mich App 491 holding that coverage extends to the greater amount.

The MVAC A provides that a motor vehicle is uninsured if it does not meet the requirements of the motor vehicle responsibility law, MCLA 257.501, et seq.; MSA 9.2201, et seq., which provides in part that "with respect to a policy which grants such excess or additional coverage the term 'motor vehicle liability policy’ shall apply only to that part of the coverage which is required by this section”. MCLA 257.520(g); MSA 9.2220(g).

We are persuaded that where an exclusionary clause is void as against the policy of the MVAC A, reinstated coverage is limited to the amount re quired so that the vehicle is not an uninsured motor vehicle within the meaning of the MV ACA.

T. G. Kavanagh, C. J., and Williams, Levin, M. S. Coleman, J. W. Fitzgerald, and Lindemer, JJ., concurred. Swainson, J., took no part in the decision of this case.