Legislative Analysis
Phone: (517) 373-8080
AUTO INSURANCE EXCEPTION FOR PRISONERS
http://www.house.mi.gov/hfa
Senate Bills 282 (S-2), 708, and 709 as reported Analysis available at
Sponsor: Sen. Sylvia Santana http://www.legislature.mi.gov
House Committee: Insurance and Financial Services
Senate Committee (SB 282): Finance, Insurance, and Consumer Protection
Senate Committee (SBs 708 and 709): Committee of the Whole
Complete to 12-7-24
SUMMARY:
Senate Bill 282 would amend the Insurance Code to prohibit automobile insurers in Michigan
from taking certain actions against an individual solely because the individual failed to
maintain insurance for a vehicle during the six-month period preceding the application if the
individual provides a certified statement of the following with the application for insurance:
• That they were a prisoner in a correctional facility (a facility or institution maintained
and operated by the Michigan Department of Corrections).
• That they were released from imprisonment within six months before the application.
• That, to their knowledge, the vehicle was not driven or moved during the preceding six
months.
If an applicant provides a certified statement meeting these requirements with their application
for insurance, the insurer would be prohibited from doing any of the following:
• Refusing to insure or to continue to insure the individual.
• Limiting the coverage available.
• Charging a reinstatement fee.
• Increasing automobile insurance premiums.
Proposed MCL 500.2116c
Senate Bills 708 and 709 would make complementary changes to the Insurance Code, each
bill adding an exception for circumstances covered by Senate Bill 282 to provisions that allow
underwriting rules to be based on an applicant’s failure to provide proof of vehicle insurance
during the six-month period preceding the application.
The bills are tie-barred to Senate Bill 282 and cannot take effect unless it is also enacted.
MCL 500.2120 (SB 708)
MCL 500.2118 (SB 709)
BACKGROUND AND DISCUSSION:
The Insurance Code requires the owner of a registered motor vehicle to maintain coverage for
that vehicle or they can be subjected to various penalties. These penalties include some actions
that can be taken by insurers, including raising premiums and charging a reinstatement fee.
House Fiscal Agency Page 1 of 2
 Supporters of the bills argued that an inability to obtain insurance can be a major barrier to
reentering society for the formerly incarcerated and can lead to issues, including parole
violations. They contend that the bills would remove unnecessary barriers in this process.
FISCAL IMPACT:
Senate Bills 282, 708, and 709 would not have a direct fiscal impact on any units of state or
local government. However, section 150 of the Insurance Code provides for recourse and
penalties in the event of a violation of the code. Under those provisions, violators have the
opportunity for an administrative hearing, and the DIFS director has the ability to levy a civil
fine of $1,000 for each violation, or $5,000 if the individual knew or reasonably should have
known that they were violating the Insurance Code. Civil fine payments under the Insurance
Code are capped at $50,000, and any revenue collected must be deposited to the general fund.
To the extent that violations of the new provision occur, additional general fund revenue may
be realized.
POSITIONS:
The following entities indicated support for the bills (11-14-24):
• Department of Insurance and Financial Services
• CPAN
Legislative Analyst: Alex Stegbauer
Fiscal Analyst: Una Jakupovic
■ This analysis was prepared by nonpartisan House Fiscal Agency staff for use by House members in their
deliberations and does not constitute an official statement of legislative intent.
House Fiscal Agency SBs 282 (S-2), 708, and 709 as reported from House committee Page 2 of 2


Statutes affected:
Substitute (S-1): 500.2118, 500.2120
Substitute (S-2): 500.100, 500.8302
Senate Introduced Bill: 500.2118, 500.2120
As Passed by the Senate: 500.100, 500.8302