Bill > SB0245

This bill comprehensively modifies Michigan's insurance code to enhance protections for policyholders by establishing clearer standards for insurers' conduct during claims processing and creating a robust framework for legal recourse. The bill expands the definition of unfair insurance practices to include a broader range of potentially problematic behaviors, such as failing to investigate claims objectively, not giving insureds the benefit of the doubt, and construing policy language in favor of the insurer. It introduces a new chapter (Chapter 30B) that provides policyholders, claimants, and third-party tort claimants with expanded rights to file civil actions against insurers for bad faith conduct. Under the new provisions, individuals can sue insurers and potentially recover not just the amount owed under the policy, but also damages for emotional distress, penalty interest, attorney fees, and in cases of egregious misconduct, punitive damages. The bill clarifies that these protections apply to various types of insurance claims, including first-party and third-party claims, and establishes a rebuttable presumption of bad faith for certain violations. Additionally, the bill specifies that these new legal provisions do not replace existing duties but instead supplement them, ultimately aiming to create more accountability and fairness in insurance claims processing.

Budget and Finance

https://legislature.mi.gov/Bills/Bill?ObjectName=2025-SB-0245