Automobile insurance policies; certificates of insurance

Issued and entered March 23, 1981 by Nancy A. Baerwaldt, Commissioner of Insurance

Section 3101a of Public Act 461 of 1980 provides that, effective April 1, 1981, an insurer, in conjunction with the issuance of an automobile insurance policy, shall provide two certificates of insurance to each policyholder, MCLA 500.3101A; MSA 24.13101a. Public Act 459 and Public Act 446 of 1980, which took effect January 15, 1981, amend Motor Vehicle Code and Insurance Code provisions concerning operation of a motor vehicle without proof of insurance coverage. This bulletin explains the provisions of Section 3101a and Public Acts 459 and 446 and provides a form with instructions to incorporate changes in the certificate of insurance.

PROVISIONS OF LAW

Pursuant to Section 3101a, an insurer shall provide two certificates of no-fault insurance to each policyholder. One of the certificates shall be marked as the Secretary of State's copy. This copy must be filed with the Secretary of State by the policyholder upon application for a vehicle registration as proof that insurance required by Section 3101 and 3102 of the Insurance Code is in force, MCLA 500.3101 and 500.3102; MSA 24.13101 and 24.13102. Two certificates of insurance, as provided above, shall be issued for each motor vehicle insured under a policy.

Public Act 459 amends Section 227 of the Motor Vehicle Code to require every application for renewal of a vehicle registration, whether made in person or by mail, to be accompanied by proof of required vehicle insurance, MCLA 257.227; MSA 9.1927.

In addition, Public Act 459 adds Section 328 to the Motor Vehicle Code to make it a civil infraction to operate a motor vehicle without proof that the insurance required pursuant to Chapter 31 of the Insurance Code is in effect, MCLA 257.328; MSA 9.2028. The section provides that a certificate of insurance issued by an insurance company stating that security which meets the requirements of Sections 3101 and is in force shall be accepted as prima facie evidence that insurance is in force for the motor vehicle described in the certificate until the expiration date shown on the certificate.

Finally, Section 328 requires that the certificate must state the name of each person named on the policy, policy declaration, or declaration certificate whose operation of the vehicle would cause the liability coverage of that insurance to become void.

FORMS WITH INSTRUCTIONS

A. Wording of the Certificate

1. The certificate of insurance shall identify the motor vehicle for which insurance is in effect, shall provide the policy number and shall indicate the expiration date of the policy.

2. The warning that certain drivers are excluded from liability coverage, required on the certificate by Section 3009(2) of the Insurance Code and Section 1104(2) of the Motor Vehicle Code, MCLA 500.3009(2), MCLA 257.1104(2); MSA 24.13009(2), MSA 4.148(4), shall appear as follows:

If this vehicle is driven by the person(s) named below, residual liability insurance does not apply and the vehicle will be considered uninsured:
___________________
___________________

WARNING -- when a named excluded person operates a vehicle, all liability coverage is void -- no one is insured. Owners of the vehicle and others legally responsible for the acts of the named excluded person remain fully personally responsible.

3. Language in the present certificate of insurance under the heading PENALTY FOR OPERATION WITHOUT INSURANCE shall be deleted and replaced by the following:

Michigan Law (MCLA 500.3101) requires that the owner or registrant of a motor vehicle registered in this state must have insurance or other approved security for the payment of no-fault benefits on the vehicle at all times. An owner or registrant who drives or permits a vehicle to be driven upon a public highway without the proper insurance or other security is guilty of a misdemeanor.

A person convicted of such a misdemeanor shall be fined not less than $200.00 nor more than $500.00, imprisoned for not more than 1 year, or both.

4. The following warning of the requirement to produce proof of insurance should be added to the policyholder's copy of the certificate.

WARNING: KEEP THIS CERTIFICATE IN YOUR VEHICLE AT ALL TIMES. If you fail to produce it upon a police officer's request, you will be responsible for a civil infraction.

5. The certificate to be submitted to the Secretary of State must be marked "SECRETARY OF STATE'S COPY."

6. The certificate should contain the following penalty language: A person who supplies false information to the secretary of state under this section or who issues or uses an invalid certificate of insurance is guilty of a misdemeanor punishable by imprisonment for not more than 1 year, or a fine of not more than $1,000.00, or both.

B. Form of Certificate

The Secretary of State requests that certificates of no-fault insurance be no larger than 3 2/3 " X 7 9/16 " and would prefer that the duplicate certificates together be no larger than 3 2/3 " X 7 9/16 ". However, format, size of certificate, weight and color are left to the company to decide. Only the language and information described in Part A are specified by statute. Sample certificates with revised wording are attached as Attachments A & B.

C. Effective Dates

1. Duplicate Certificates. Public Act 461 of 1980 requires companies to provide two certificates of insurance, with one marked as the Secretary of State's copy, with all policies of no-fault auto insurance issued on or after April 1, 1981.

2. Changes to Certificate. Public Act 446 and Public Act 459, which change the penalty for not having insurance and provide penalties for not producing proof of insurance, became effective January 15, 1981. Therefore, companies should begin issuing certificates with revised language for all new and renewal policies as soon as possible. The named driver exclusion warning should already be on all certificates, pursuant to Section 3009(2) and Section 1104(2) of the Code and Insurance Bureau Bulletin 79-11.

This bulletin shall be effective immediately. Operation of this bulletin does not supersede or replace operation of any bulletins currently in effect.