New Auto Liability Limits, Old Contract Law Principles Meet in Published Court of Appeals Opinion

In June of 2019, the Legislature amended MCL 500.3009 as part of a collection of no-fault reform measures. Progressive Marathon Ins Co v Pena, ___ Mich App ___, ___; ___ NW2d ___ (2023) (Docket No. 358849); slip op at 3. The reforms included changes to liability coverage and raised the minimum bodily injury liability limits in automobile policies. Id.

For policies “delivered or issued for delivery” after July 1, 2020, bodily injury liability limits of at least $250,000 per person and $500,000 per accident are required. MCL 500.3009(1).

However, those limits are subject to MCL 500.3009(5), which allows “an applicant for or named insured in” such a policy to select coverages of $50,000 per person and $100,000 per accident.

In Newton v Progressive Marathon Ins Co, ___ Mich App ___, ___; ___ NW2d ___ (2024) (Docket No. 364569), the panel held that a parent’s selection of the lower limits was binding on her son, who was under 18 but owned the insured vehicle.