Michigan Laws 500.1607 – Dates on which insurance effective or terminated
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(1) Creditor-placed insurance shall become effective on the latest of the following dates:
(a) The date of the credit transaction.
Terms Used In Michigan Laws 500.1607
- Credit transaction: means a transaction by the terms of which the repayment of money loaned or credit commitment made, or payment of goods, services, or properties sold or leased, is to be made at a future date or dates. See Michigan Laws 500.1605
- Creditor: means the lender of money or vendor or lessor of goods, services, property, rights, or privileges for which payment is arranged through a credit transaction, or any successor to the right, title, or interest of a lender, vendor, or lessor. See Michigan Laws 500.1605
- Creditor-placed insurance: means insurance that is purchased unilaterally by the creditor, who is the named insured, subsequent to the date of the credit transaction, providing coverage against loss, expense, or damage to collateralized personal property as a result of fire, theft, collision, or other risks of loss that would either impair a creditor's interest or adversely affect the value of collateral covered by limited dual interest insurance. See Michigan Laws 500.1605
- Debtor: means the borrower of money or a purchaser or lessee of goods, services, property, rights, or privileges, for which payment is arranged through a credit transaction. See Michigan Laws 500.1605
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Insurer: means an individual, corporation, association, partnership, reciprocal exchange, inter-insurer, Lloyds organization, fraternal benefit society, or other legal entity, engaged or attempting to engage in the business of making insurance or surety contracts. See Michigan Laws 500.106
- Personal property: All property that is not real property.
(b) The date prior coverage, including prior creditor-placed insurance coverage, lapsed.
(c) One year before the date on which the related insurance charge is made to the debtor‘s account.
(d) A later date provided for in the agreement between the creditor and insurer.
(2) Creditor-placed insurance shall terminate on the earliest of the following dates:
(a) The date other acceptable insurance becomes effective, subject to the debtor providing acceptable evidence of the other insurance to the creditor.
(b) The date the collateralized personal property is repossessed, unless the property is returned to the debtor within 10 days of the repossession.
(c) The date the collateralized personal property is determined by the insurer to be a total loss.
(d) The date the debt is completely extinguished.
(e) An earlier date specified in the individual policy or certificate of insurance.
(3) An insurance charge shall not be made to a debtor for a term longer than the scheduled term of the creditor-placed insurance when it becomes effective, and an insurance charge shall not be made to the debtor for creditor-placed insurance before the effective date of the insurance.
(4) If a charge is made to a debtor for creditor-placed insurance coverage that exceeds a term of 1 year, the debtor shall be notified at least annually that the insurance will be canceled and a refund or credit of unearned charges made if evidence of acceptable insurance secured by the debtor is provided.