State Farm Mut. Auto. Ins. Co. v. Shelly
| Decision Date | 23 July 1975 |
| Docket Number | No. 56846,56846 |
| Citation | 394 Mich. 448,231 N.W.2d 641 |
| Parties | STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, a Foreign Corporation, Plaintiff-Appellant, v. Harold Francis SHELLY, Sr., and Harold Francis Shelly, Jr., Defendants-Appellees, and Joseph H. Hawley, Administrator of the Estate of Dorothy Hawley, Deceased, et al., Defendants-Appellees. 394 Mich. 448, 231 N.W.2d 641 |
| Court | Michigan Supreme Court |
Draugelis, Ashton & Scully, Plymouth, for plaintiff-appellant.
Harvey, Kruse & Westen, P.C., Detroit, for defendants-appellees.
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 (MVACA).
Under the MVACA, 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 MVACA. 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 MVACA 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 MVACA provides that a motor vehicle is uninsured if it does not meet the requirements of the motor vehicle responsibility law, M.C.L.A. § 257.501 Et seq.; M.S.A. § 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'. M.C.L.A. § 257.520(g); M.S.A. § 9.2220(g).
We are persuaded that where an exclusionary clause is void as against the policy of the MVACA, reinstated coverage is limited to the amount required so that the vehicle is not an uninsured motor vehicle within the...
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... ... DeWitt v. Young, 229 Kan. 474, 625 P.2d 478 (1981); State Farm Mutual Automobile Insurance Co. v. Shelly, 394 Mich. 448, 231 N.W.2d 641 (1975). The rationale for this rule is that the exclusion is invalid only to the extent it violates the statutory requirements. But for the statutory prohibition, the household exclusion clause would be valid and preclude the carrier's increased liability. See ... ...
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