I have an elderly friend who crashed her vehicle last winter while driving a little too fast on icy conditions. Unfortunately, she was uninsured at the time of the crash because she inadvertently let her no-fault policy lapse. Due to some other complications with her driving record, she is now a named excluded driver on the family’s new no-fault policy. That means there is no coverage on the vehicle when she drives it. If she were to get in an accident, she would risk another total vehicle loss without coverage.
There’s another more serious risk she takes when driving the vehicle: no coverage for injuries should she get in an accident. This year, the legislature amended MCL 500.3113 to prohibit named excluded drivers from collecting personal protection insurance benefits (PIP) (e.g., medical expenses, home modifications, wage losses, etc.).
Insurers need to take certain steps, however, to obtain a valid excluded driver endorsement. Department of Insurance and Financial Services (DIFS) Bulletin No 2015-19-INS describes these requirements. Each endorsement must be filed and approved by the director of DIFS. The insurer must procure the insured’s authorization for the endorsement using a form that meets the requirements in paragraph B of the Bulletin. The face of the policy or declarations page must contain the statutory warning in MCL 500.3009(2) and should provide notice that a named excluded driver is not entitled to PIP benefits if he or she gets in an accident while driving a vehicle or motorcycle as to which he or she was named an excluded driver. Failure to provide this notice is an unfair or deceptive act. I am not sure if my friend’s insurer followed these steps—and I hope we never have to find out.
For more information on other amendments to the No-Fault Act this year, check out the First-Party No-Fault Update 2015.