WILLIAMS, J.

The Michigan No-Fault Insurance Act, which became law on October 1, 1973, was offered as an innovative social and legal response to the long payment delays, inequitable payment structure, and high legal costs inherent in the tort (or "fault") liability system. The goal of the no-fault insurance system was to provide victims of motor vehicle accidents assured, adequate, and prompt reparation for certain economic losses. The Legislature believed this goal could be most effectively achieved through a system of compulsory insurance, whereby every Michigan motorist would be required to purchase no-fault insurance or be unable to operate a motor vehicle legally in this state. Under this system, victims of motor vehicle accidents would receive insurance benefits for their injuries as a substitute for their common-law remedy in tort.

The No-Fault Act, insofar as it provides benefits to victims of motor vehicle accidents without regard to "fault" (as a substitution for tort remedies which are, in part, abolished), constitutionally accomplishes its goal. After intense scrutiny of this litigation's extensive record, this Court holds that the No-Fault Act does not exceed the traditional scope of the Legislature's police power. The partial abolition of tort remedies under the act is consistent with constitutional principles articulated by this Court. The act's personal injury protection insurance scheme, with its comprehensive and expeditious benefit system, reasonably relates to the evidence advanced at trial that under the tort liability system the doctrine of contributory negligence denied benefits to a high percentage of motor vehicle accident victims, minor injuries were overcompensated, serious injuries were undercompensated, long payment delays were commonplace, the court system was overburdened, and those with low income and little education suffered discrimination. See Part V, infra. Likewise, the act's property damage protection scheme reasonably relates to the valid public purposes of creating an incentive to build safer motor vehicles, encouraging group rates, and reducing costs by eliminating the necessity of accident "fault" investigation. See Part VI, infra.

However, while the No-Fault Act is, in theory, a valid, rational response to problems affecting the general welfare, the actual mechanisms for protecting the welfare of individual Michigan motorists, required by law to purchase no-fault insurance, are constitutionally deficient in failing to provide due process. The Legislature, in the No-Fault Act and other sections of the Insurance Code, recognized the significance of a motorist's interest in the registration and operation of a motor vehicle on Michigan streets and highways. Measures were taken to assure that compulsory no-fault insurance in Michigan would be available to motorists at fair and equitable rates. These measures are, unfortunately, inadequate to protect individual motorists, who must purchase no-fault insurance from private insurers, from potentially unfair insurance rates, insurance refusal or cancellation. In particular, under the No-Fault Act and the Insurance Code:

1. The statutory protection against "excessive, inadequate or unfairly discriminatory" rates is without the support of clarifying rules established by the Commissioner of Insurance, without legislatively sufficient definition, and without any history of prior court interpretation; the legislative mandate is thus reduced to mere exhortation (see Part III-B[1] infra);

2. There are inadequate statutory provisions for a motorist attacking the validity of an individual rating decision (see Part III-B[1] infra);

3. There is no adequate statutory provision permitting an individual to challenge insurance refusal, discriminatory cancellation, or assignment to the "Automobile Placement Facility" with its presumptively higher rates (see Part III-B[2] infra).

The constitutional status of the No-Fault Act places this Court in an extraordinary jurisprudential position: the No-Fault Act, which has substantially affected every Michigan motorist, every insurance company underwriting motor vehicle insurance in Michigan, and our entire system of civil justice for nearly five years, is constitutional in its general thrust but unconstitutionally deficient in its mechanisms for assuring that compulsory no-fault insurance is available to Michigan motorists at fair and equitable rates.

We therefore believe it necessary, for purposes of the general jurisprudence, the general welfare of the public and the administration of justice, to hold that the No-Fault Act will remain in effect for 18 months from the issuance of this opinion.

During this period, the Legislature and the Commissioner of Insurance can remedy the act's deficiencies by taking necessary constitutional corrective action assuring that compulsory no-fault insurance is available at fair and equitable rates. The types of corrective actions necessary to remedy the act's due process deficiencies are set out in Part III-C of our opinion.

Toward the end of this period, this Court will re-examine the status of the No-Fault Act to determine whether the present constitutional deficiencies have been remedied. At that time, an appropriate order reflecting the act's constitutional status will be entered by this Court.

I.

Prior to October 1, 1973, the effective date of the No-Fault Act, 11 named plaintiffs in their own behalf and as representatives of several classes of other persons initiated this action against the Secretary of State, the Commissioner of Insurance, and 25 named automobile insurers as representatives of the entire automobile insurance industry in Michigan. The complaint sought a declaratory judgment as to the constitutionality of the No-Fault Act and an injunction against the act's enforcement. Plaintiffs initially had sought a temporary injunction against enforcement of the act. This relief had been denied.

An amended complaint was then filed, pursuant to an order of the trial court, on December 6, 1973, adding Michigan's Attorney General as a defendant. Additionally, the following amendments were made: one named plaintiff was dropped and eight others were added as named plaintiffs; and the assertion of rights to declaratory and injunctive relief were added on behalf of five of the named plaintiffs as property taxpayers, pursuant to GCR 1963, 201.2(3). Two of the defendant insurers, Allstate Insurance Company and State Farm Mutual Automobile Insurance Company, filed cross-complaints, challenging the constitutionality of the act's property damage protection insurance scheme, §§ 3121, 3123, 3125 and 3127.

Pursuant to GCR 1963, 301.6, Judge Horace W. Gilmore was assigned to conduct all matters preliminary to trial and to try the case. Preliminary and final pretrial conferences were conducted on four days during November and December 1973. At these conferences the parties identified legal and factual issues to be tried and stipulated to facts which were undisputed. The pretrial statement issued at the conclusion of the conferences was subsequently amended on several occasions before trial to include additional issues.

Judge Gilmore ably and commendably conducted the trial, which occupied 35 trial days, from January 14 to March 21, 1974. The parties were given every opportunity for argument; the trial record includes over 5,000 pages of transcript and over 200 exhibits.

On May 20, 1974 Judge Gilmore filed a learned and thoughtful opinion of over 100 pages. The court held that plaintiffs had standing to raise every constitutional objection they asserted pursuant to the "taxpayers' suit" rule, and statute (GCR 1963, 201.2[3]; MCL 600.2041; MSA 27A.2041), and the declaratory judgment rule (GCR 1963, 521.1). The court also held that the No-Fault Act did not significantly infringe or penalize plaintiffs' constitutional "right to travel". The court held constitutional:

§ 3101(1), which requires the purchase of no-fault insurance as a condition precedent to registration and operation of a motor vehicle;

the penalties imposed for non-compliance with the act's compulsory insurance requirement (§ 3102[2]);

the act's personal injury protection insurance scheme;

the limitation of $1,000 for no-fault funeral and burial expenses (§ 3107);

the classification between workers in the home and workers outside the home in terms of maximum benefits payable in case of injury (§ 3107);

the delegation of authority to the Commissioner of Insurance to approve deductibles as provided in § 3109a of the act;

§ 3102(1), which requires that nonresident motorists maintain no-fault insurance when in Michigan for an aggregate of more than 30 days in any calendar year;

§ 3116 which, read in light of § 3135, can be interpreted to mean that an insurer paying personal injury insurance benefits is entitled to reimbursement from the tort recovery of an injured person to the extent that the tort recovery includes damages for losses for which personal injury insurance benefits were paid;

§ 3114, which requires that a person who suffers accidental bodily injury while an operator or passenger of a motor vehicle engaged in the business of transporting passengers seek personal injury insurance benefits from the insurer of the vehicle.

The court held unconstitutional:

the act's property damage protection insurance scheme;

§ 3101(2), which excludes two-wheel vehicles from coverage under the act;

§ 3107(b), which requires that the cost of replacement for ordinary and necessary services be "reasonably incurred" before reimbursement;

§ 3109(1), which requires that benefits provided or required to be provided under the laws of any state or the federal government be subtracted from personal injury insurance benefits;

the delegation of authority to the Commissioner of Insurance to approve deductibles as provided in § 3109(3) of the act;

§ 3113, which denies injured "transient" nonresident motorists who have not purchased no-fault insurance or whose insurer has not filed a certificate in compliance with § 3163 personal injury insurance benefits and tort recovery below the threshold of § 3135(2).

The court also held that the sections of the act declared unconstitutional were severable.

On June 25, 1974, the trial court issued its declaratory judgment. Upon entry of this judgment, plaintiffs moved for a new trial. After a hearing, this motion was denied by the court.

Plaintiffs and various defendants appealed to the Court of Appeals.

Application for leave to appeal to this Court prior to decision by the Court of Appeals was filed on August 21, 1974, by all defendants and was denied by this Court December 23, 1974.

Thereafter, upon review of the record and the hearing of arguments, the Court of Appeals issued its opinion November 5, 1975.

The Court of Appeals disagreed with the trial court that the "taxpayers' suit" rule and statute, supra, were applicable to the instant case. 65 Mich. App. 355, 362; 237 N.W.2d 325 (1975). The Court then found plaintiffs had standing under the declaratory judgment rule, supra, to challenge a limited number of issues.

The Court of Appeals held constitutional the act's personal injury protection scheme (affirming the trial court), 65 Mich. App. 355, 365-367, and the act's exclusion of two-wheel vehicles from compulsory no-fault coverage (overruling the trial court), 65 Mich. App. 355, 367-368. The Court held unconstitutional the act's property damage protection scheme (affirming the trial court), 65 Mich. App. 355, 368-370. The Court also held that the unconstitutional property damage protection scheme was severable. 65 Mich. App. 355, 372.

On November 25, 1975, plaintiffs filed a motion for rehearing with the Court of Appeals challenging the findings of the Court of Appeals in its opinion but, more specifically, requesting the Court of Appeals remand the case for further testimony consistent with GCR 1963, 820.1(5). Plaintiffs' motion for rehearing in the Court of Appeals was denied on December 17, 1975. On January 9, 1976, plaintiffs filed a motion for leave to appeal to this Court. Leave was granted on May 27, 1976.

II.

A crucial threshold question concerns plaintiffs' standing to raise certain issues.

Plaintiffs first seek to establish standing to challenge the constitutionality of the No-Fault Act under the court rule and statute which creates a "taxpayers' suit". GCR 1963, 201.2(3) and MCL 600.2041; MSA 27A.2041, which are identical, deal with real parties in interest. The rule and statute provide in pertinent part:

"Every action shall be prosecuted in the name of the real party in interest * * * and further

* * *

"3) An action to prevent the illegal expenditure of state funds or to test the constitutionality of a statute relating thereto may be brought * * * in the names of at least 5 residents of this state who own property assessed for direct taxation by the county wherein they reside."

The trial court held that plaintiffs had standing under the rule and statute to raise every constitutional objection they asserted. The Court of Appeals reversed, declaring:

"We disagree with the trial court's ruling that the court rule provides a basis for plaintiffs' suit. Plaintiffs are not concerned with the illegal expenditure of state funds. The court rule allows taxpayers aggrieved by the outlay of state funds to hurdle the traditional standing obstacle in taxpayers suits. We do not read it as permitting a group to challenge any legislation merely because of an incidental expenditure of state funds; almost all legislation involves some public spending. GCR 1963, 201.2(3) is inapplicable to this litigation." 65 Mich. App. 355, 362.

We agree. The No-Fault Act does not, on its face, contemplate the "expenditure of state funds". We do not believe that the "taxpayers' suit" rule and statute is intended to give plaintiffs standing to "test the constitutionality" of an entire act when the expenditure of funds alleged is incidental to its implementation. Compare Hertel v Racing Commissioner, 68 Mich. App. 191; 242 N.W.2d 526 (1976); Jones v Racing Commissioner, 56 Mich. App. 65; 223 N.W.2d 367 (1974).

Alternatively, both plaintiffs and cross-plaintiffs seek to establish standing under the GCR 1963, 521.1 declaratory judgment rule. GCR 1963, 521.1 provides:

"In a case of actual controversy within its jurisdiction, any circuit court of this state may declare the rights and other legal relations of any interested party seeking a declaratory judgment, whether or not relief is or could be sought or granted."

The declaratory judgment rule was intended and has been liberally construed to provide a broad, flexible remedy with a view to making the courts more accessible to the people. 2 Honigman Hawkins, Michigan Court Rules Annotated (2d ed), Committee Comment, p 683; Comm'r of Revenue v Grand Trunk W R Co, 326 Mich. 371, 375; 40 N.W.2d 188 (1949).

The existence of an "actual controversy" is a condition precedent to invocation of declaratory relief. In general, "actual controversy" exists where a declaratory judgment or decree is necessary to guide a plaintiff's future conduct in order to preserve his legal rights. Updegraff v Attorney General, 298 Mich. 48, 52; 298 N.W. 400 (1941); Flint v Consumers Power Co, 290 Mich. 305, 309-310; 287 N.W. 475 (1939); see, also, Welfare Employees Union v Civil Service Comm, 28 Mich. App. 343, 350-351; 184 N.W.2d 247 (1970).

This requirement of an "actual controversy" prevents a court from deciding hypothetical issues. However, a court is not precluded from reaching issues before actual injuries or losses have occurred. Merkel v Long, 368 Mich. 1, 11-14; 117 N.W.2d 130 (1962). Also, before affirmative declaratory relief can be granted, it is essential that a plaintiff, at a minimum, pleads facts entitling him to the judgment he seeks and proves each fact alleged, i.e., a plaintiff must allege and prove an actual justiciable controversy. See Kuhn v East Detroit, 50 Mich. App. 502; 213 N.W.2d 599 (1973).

Therefore, what is essential to an "actual controversy" under the declaratory judgment rule is that plaintiffs plead and prove facts which indicate an adverse interest necessitating the sharpening of the issues raised.

The five plaintiffs who testified at trial all owned an automobile. Two had purchased no-fault insurance and three had not. One of the plaintiffs who had purchased no-fault insurance, Melvin Janasevich, testified that he was a retiree with no work income who cares for his paralyzed, wheelchair-confined wife. Plaintiffs' amended complaint names three persons who are "motorcycle owners and operators"; defendants' answer admits the status of these plaintiffs. Also, it was undisputed on the record that the cross-plaintiff insurance companies who challenge the validity of the property damage provisions of the No-Fault Act were required to issue insurance policies in compliance with the act if they wished to continue to underwrite in Michigan.

This Court deeply appreciates that the No-Fault Act, in radically redefining the nature of Michigan's motor vehicle insurance, profoundly and importantly affects a crucial dimension of our lives. We are also aware that the constitutionality of this act has been in question since this action was commenced in August, 1973. In light of the record and our belief that plaintiffs, cross-plaintiffs, and the people of the State of Michigan deserve as definitive a decision on the challenges to the No-Fault Act as judiciously can be afforded within the parameters of the above stated rules for declaratory relief, we hold that plaintiffs and cross-plaintiffs have established standing under GCR 1963, 521.1 to raise the following issues:

1) whether § 3101, which requires registrants and operators of motor vehicles to maintain compulsory personal injury protection insurance, property protection damage insurance, and residual liability insurance, is constitutional;

2) whether the act's personal injury protection insurance scheme violates the due process and equal protection clauses of the Michigan and United States Constitutions (Const 1963, art 1, §§ 2, 17; US Const, Am XIV);

3) whether the act's property damage protection insurance scheme violates the due process and equal protection clauses of the Michigan and United States Constitutions;

4) whether § 3101(2), in excluding two-wheel motor vehicles from coverage under the act, violates the equal protection clauses of the Michigan and United States Constitutions;

5) whether the act's statutory scheme with respect to work-loss reimbursement and reimbursement for replacement services, § 3107, violates the equal protection clauses of the Michigan and United States Constitutions;

6) whether the act's statutory schemata with respect to nonresident, out-of-state motorists, § 3102(1), which requires nonresident motorists to maintain no-fault insurance when they are in Michigan "an aggregate of more than 30 days in any calendar year", and § 3113 read inter alia with § 3135(2), which pertains to transient nonresident motorists, violate the due process and equal protection clauses of the Michigan and United States Constitutions.

We do not reach two issues because they are not necessary to decision and appear to have been abandoned. Also, we do not believe these plaintiffs have established standing under the declaratory judgment rule as to three issues. Two of these issues are properly before this Court in Workman v Detroit Automobile Inter-Insurance Exchange, Docket No. 58106; and O'Donnell v State Farm Mutual, Docket No. 58833.

III.

The first and most important issue before us, stated in its general terms, is whether § 3101(1) of the act, which requires registrants and operators of motor vehicles to maintain compulsory personal injury protection insurance, property damage insurance, and residual liability insurance, is constitutional.

We perceive the issue of the constitutionality of the "compulsory insurance requirement" of § 3101(1) to be, in essence, two-fold:

(A) Can the Legislature constitutionally, as a condition precedent to registration and operation of a motor vehicle, require the purchase of no-fault personal protection insurance and no-fault property protection insurance, or in the alternative require security approved by the Secretary of State?

(B) Does the present regulatory scheme for compulsory no-fault insurance sufficiently protect the interests of registrants and operators of motor vehicles in accord with the due process clause of the Michigan and United States Constitutions as to

(1) the fairness of insurance rates, and

(2) the proper availability of insurance.

(A) Compulsory No-Fault Insurance

Before the advent of no-fault insurance, the power of the Legislature to require all motorists to obtain mandatory liability insurance as a prerequisite to receipt of a driving license was well-established. The United States Supreme Court recently observed in Bell v Burson, 402 U.S. 535, 539; 91 S Ct 1586; 29 L Ed 2d 90 (1971):

"If the statute barred the issuance of licenses to all motorists who did not carry liability insurance or who did not post security, the statute would not, under our cases, violate the Fourteenth Amendment. Ex parte Poresky, 290 U.S. 30; 54 S Ct 3; 78 L Ed 152 (1933); Continental Baking Co v Woodring, 286 U.S. 352; 52 S Ct 595; 76 L Ed 1155; 81 ALR 1402 (1932); Hess v Pawloski, 274 U.S. 352; 47 S Ct 632; 71 L Ed 1091 (1927)."

The highest courts of eight states have reviewed their states' no-fault automobile insurance laws. Every court which has considered the issue of whether a legislature, within its police power, can require no-fault insurance as a condition precedent to the operation of a motor vehicle, has answered in the affirmative. This Court also holds that the Michigan Legislature has authority under its police power to compel the purchase of no-fault insurance.

The No-Fault Act's self-insurance concept is embraced within the traditional scope of the police power as stated in the maxim "sic utere tuo ut alienum non laedas" ("so use your own that you do not injure that of another"). 16 Am Jur 2d, Constitutional Law, § 267, p 523. The insurance required under the No-Fault Act protects not only the driver of a motor vehicle, but also passengers, pedestrians, owners of fixed property, and owners of properly parked vehicles. Furthermore, the operation of a motor vehicle, even when it affects no one but the driver, results in serious and immediate danger to a large section of society. West Coast Hotel Co v Parrish, 300 U.S. 379, 394; 57 S Ct 578; 81 L Ed 703 (1937). This principle, that those who use the public highways may properly be required to provide security for loss that may predictably be suffered by others on account of such use, can properly be extended to require security for the loss that the state itself might otherwise incur on account of such use.

(B) Due Process

The protections of the due process clause can only be invoked when there has been state action. Jackson v Metropolitan Edison Co, 419 U.S. 345, 349-350; 95 S Ct 449; 42 L Ed 2d 477 (1974).

The No-Fault Act compels insurance for all motor vehicles; failure to comply with this requirement may result in criminal and civil sanctions. In addition, the No-Fault Act specifies the extent of coverage to be provided and the conditions of payment for insurance benefits. Finally, the No-Fault Act and the Insurance Code provide for the assignment of claims and risks. In effect, insurance companies are the instruments through which the Legislature carries out a scheme of general welfare. This legislation goes beyond a grant of a monopoly or an attempt to regulate a utility; there exists "a sufficiently close nexus between the State and the challenged action of the regulated entity so that the action of the [regulated entity] may fairly be treated as that of the State itself". Jackson v Metropolitan Edison Co, supra, 419 U.S. 345, 351.

The interest of plaintiffs that is affected by compulsory no-fault insurance is not a previously recognized common-law or constitutional right.

This Court, however, has recognized that the concepts of "liberty" and "property" protected by due process "are not to be defined in a narrow or technical sense but are to be given broad application". Bundo v Walled Lake, 395 Mich. 679, 690; 238 N.W.2d 154 (1976). See, also, Board of Regents v Roth, 408 U.S. 564; 92 S Ct 2701; 33 L Ed 2d 548 (1972), and Perry v Sindermann, 408 U.S. 593, 601; 92 S Ct 2694; 33 L Ed 2d 570 (1972).

The existence of interests or benefits entitled to due process protection depends on the extent to which government activity has fostered citizen dependency and reliance on the activity. We are reminded: "It is a purpose of the ancient institution of property to protect those claims upon which people rely in their daily lives, reliance that must not be arbitrarily undermined". Board of Regents v Roth, 408 U.S. 564, 577. The Supreme Court, 1975 Term, 90 Harv L Rev 86-104 (1976); Tribe, American Constitutional Law, pp 514, 522; Pennsylvania Coal Mining Ass'n v Insurance Dep't, 471 Pa. 437; 370 A.2d 685 (1977).

In Michigan the independent mobility provided by an automobile is a crucial, practical necessity; it is undeniable that whether or not a person can obtain a driver's license or register and operate his motor vehicle profoundly affects important aspects of his day-to-day life.

The cases, statutes and rules affecting the issuance of drivers' licenses reflect an appreciation of the importance of the access to motor vehicles. Crampton v Dep't of State, 395 Mich. 347; 235 N.W.2d 352 (1975), and Gargagliano v Secretary of State, 62 Mich. App. 1, 11-12; 233 N.W.2d 159 (1975), opinion by N.J. KAUFMAN, J.

A driver's license, once issued, is a significant interest subject to constitutional due process protections. Bell v Burson, 402 U.S. 535, 539; 91 S Ct 1586; 29 L Ed 2d 90 (1971). Although the compulsory insurance requirement of the No-Fault Act does not directly affect the issuance of a driver's license, it directly affects the use of such a license: a licensee may not register or operate a motor vehicle in Michigan without no-fault insurance. A driver's license is, clearly, of little use unless a licensee can register and operate a motor vehicle. We believe that the interest in registering and operating a motor vehicle is as significant as the interest in the use of a driver's license.

In choosing to make no-fault insurance compulsory for all motorists, the Legislature has made the registration and operation of a motor vehicle inexorably dependent on whether no-fault insurance is available at fair and equitable rates. Consequently due process protections under the Michigan and United States Constitutions (Const 1963, art 1, § 17; US Const, Am XIV) are operative.

The Legislature has, additionally, fostered the expectation that no-fault insurance will be available at fair and equitable rates. Section 2403(1)(d) of the Insurance Code states that "Rates shall not be excessive, inadequate or unfairly discriminatory", MCL 500.2403(1)(d); MSA 24.12403(1)(d); § 3301(1)(a) of the Insurance Code provides the "guarantee" that no-fault insurance coverage "will be available to any person who is unable to procure such insurance through ordinary methods". MCL 500.3301(1)(a); MSA 24.13301(1)(a).

We therefore conclude that Michigan motorists are constitutionally entitled to have no-fault insurance made available on a fair and equitable basis. The availability of no-fault insurance and the no-fault insurance rate regulatory scheme are, accordingly, subject to due process scrutiny.

(1) In scrutinizing the statutory scheme for regulating insurance companies' underwriting and rate-making practices, we must look beyond the No-Fault Act itself to other provisions of the Insurance Code, including the Uniform Trade Practices Act, MCL 500.2400 et seq.; MSA 24.12400 et seq., and MCL 500.2001 et seq.; MSA 24.12001 et seq.

Under the present regulatory scheme, rates and rate-making factors are proposed and supporting material is filed by private insurance companies. MCL 500.2406; MSA 24.12406. The Commissioner of Insurance may approve or reject the proposed rates and rate-making factors. If he takes no action within 30 days, however, "the filing shall be deemed to meet the requirements of this chapter". MCL 500.2408; MSA 24.12408.

An alternative method for filing provides that an insurance company can specify the date upon which the rate becomes effective. The Commissioner of Insurance then has 15 days within which to act on that filing. If the filing is not disapproved within 15 days of the filing, "the filing shall be deemed to be approved". MCL 500.2430; MSA 24.12430.

The Insurance Code also provides that rating plans may measure any differences among risks that may have a probable effect upon losses or expenses. However, such rates shall not be "excessive, inadequate or unfairly discriminatory". MCL 500.2403; MSA 24.12403. See, also, MCL 500.2027; MSA 24.12027.

Manuals pertaining to classifications, rules and rates, rate plans and every modification of any of the foregoing must be filed with the Commissioner of Insurance. MCL 500.2406; MSA 24.12406.

The no-fault insurance rate classifications adopted by the insurance industry are allegedly the result of competition, not the governmental process. Private insurance companies are, and should be, primarily concerned with making a profit, while providing a public service.

We also recognize that it is within the Legislature's authority to prescribe that rates shall be primarily set by competition in the marketplace. However, due process, at a minimum, requires that rates are not, in fact, "excessive, inadequate or unfairly discriminatory" and, further, that persons affected have notice as to how their rates are determined and an adequate remedy regarding that determination.

Although the Legislature has provided some due process protection, significant deficiencies remain. First, the entire rate structure is suspect. The statutory stricture against "excessive, inadequate or unfairly discriminatory" rates is without the support of clarifying rules established by the Commissioner, without legislatively sufficient definition, and without any history of prior court interpretation. The legislative due process mandate is thus reduced to mere exhortation. When we add that the statute authorizes insurers to utilize any classification scheme which "may measure any differences among risks that may have a probable effect on losses or expenses" (emphasis added), it becomes clear that rates can be established on insubstantial bases which do not satisfy due process. Absent administrative rules or legislative definition giving substance to the statutory language, there are inadequate safeguards against arbitrary action or invidious discrimination. Davis, Administrative Law of the Seventies, § 6.13 (collecting cases).

Second, the present system of rate regulation denies due process to the motorist attacking the validity of a rate. Filings and supporting information submitted by insurers are open to public inspection only after the filing becomes effective. MCL 500.2406; MSA 24.12406. This certainly is questionable due process. Also, under the Insurance Code, if a complainant, upon administrative review, can convince the Commissioner of Insurance that a filed rate does not meet the statutory requirements, the Commissioner will determine that "within a reasonable period thereafter, such filing shall be deemed no longer effective". MCL 500.2420; MSA 24.12420. This leaves the complainant with the unacceptable choice of paying the invalid rate from the date of the effective filing until the subsequent date when the filing is no longer effective or taking the risk of not having insurance. This is certainly not due process.

(2) In scrutinizing the statutory scheme affecting the availability of no-fault insurance, we again look beyond the No-Fault Act itself to the Insurance Code, Chapter 20, the Uniform Trade Practices Act, MCL 500.2001 et seq.; MSA 24.12001 et seq., and Chapter 33, the "Automobile Placement Facility" (or "assigned risk plan"), MCL 500.3301 et seq.; MSA 24.13301 et seq.

Under § 2027 of the Uniform Trade Practices Act, the Legislature statutorily defines "[u]nfair methods of competition and unfair or deceptive acts or practices in the business of insurance" as including "[r]efusing to insure, or refusing to continue to insure * * * an individual" for a number of patently discriminatory reasons. MCL 500.2027; MSA 24.12027.

In establishing the "Automobile Placement Facility", the Legislature expressly provided "the guarantee that automobile insurance coverage will be available to any person who is unable to procure such insurance through ordinary methods". MCL 500.3301(1)(a); MSA 24.13301(1)(a).

However, although § 2027 of the Uniform Trade Practices Act attempts, through the good offices of the Commissioner of Insurance, to protect from discrimination a motorist who is refused no-fault insurance or whose no-fault insurance is cancelled, the act does not provide such motorists with an individual legal remedy for challenging an alleged discriminatory basis for the refusal or cancellation. See Wolff v McDonnell, 418 U.S. 539, 557-558; 94 S Ct 2963; 41 L Ed 2d 935 (1974).

Furthermore, a motorist placed in the "Automobile Placement Facility" and classified as an "assigned risk" is subject to a statutory presumption that the rates charged will be higher than the rates for motorists in the open marketplace. MCL 500.3365; MSA 24.13365. In addition, a motorist insured by the "Automobile Placement Facility" is exposed to the procedural and substantive inadequacies of the facility's rate regulatory scheme (which are, essentially, the same as the inadequacies of the rate regulatory scheme for motorists able to obtain insurance from an insurance company in the marketplace). Also, this facility does not provide the same varieties of coverage options offered in the standard market. Finally, there is no statutory provision allowing such a motorist to challenge his assignment to the "Automobile Placement Facility" with its presumptively higher rates.

Therefore, although no-fault insurance may be available, motorists can be refused no-fault insurance or have their insurance cancelled without effective legal redress for challenging refusal or discriminatory cancellation. Furthermore, motorists can be placed into the "Automobile Placement Facility" without an assurance of fair and equitable rates, without an opportunity to obtain the same variety of coverage options, or without a right to challenge such placement.

These deficiencies, in our opinion, most certainly deny due process.

(3) These statutory defects as to the availability of no-fault insurance and the scheme for regulating no-fault insurance rates illustrate the inadequacies of the present statutory system of compulsory insurance but do not define what process is "due".

We therefore feel it necessary to identify the concerns which must be addressed in any new system for rate-regulation and "availability", although "[t]he very nature of due process negates any concept of inflexible procedures universally applicable to every imaginable situation". Cafeteria Restaurant Workers Union, Local 473 v McElroy, 367 U.S. 886, 895; 81 S Ct 1743; 6 L Ed 2d 1230 (1961).

In determining what process is "due" we consider:

"* * * First, the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and finally, the Government's interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail." Mathews v Eldridge, 424 U.S. 319, 335; 96 S Ct 893; 47 L Ed 2d 18 (1976).

We are concerned that a person's interest in the registration and operation of a motor vehicle may be effectively suspended by the legislative requirement that registrants and operators of motor vehicles purchase no-fault insurance as a condition to the operation of a motor vehicle if no-fault insurance is not made available on a fair and equitable basis.

The current procedures of the Commissioner of Insurance for the promulgation of rates by insurance companies do not provide sufficient assurance that rates and rate-making factors will be substantially justified. Absent adequate procedures, there is a danger that persons similarly situated will ultimately be treated differently with respect to their recognized interest in registering and operating a motor vehicle. See Davis, Administrative Law of the Seventies, § 6.13.

At the same time, we recognize the insurance companies' need for prompt adjustment of rates which provide adequate capitalization and the state's desire to minimize its administrative burden. We are also concerned with the availability of insurance. Individuals must have the knowledge necessary to protect themselves against erroneous or discriminatory underwriting and rate-making decisions. See Fuentes v Shevin, 407 U.S. 67; 92 S Ct 1983; 32 L Ed 2d 556 (1972). There must be available adequate means of redress for such errors and discrimination. See Dixon v Love, 431 U.S. 105; 97 S Ct 1723; 52 L Ed 2d 172 (1977). There must also be available adequate means of redress for insurance refusal, discriminatory insurance cancellation, or assignment to the "Automobile Placement Facility" with its presumptively higher rates.

These objectives can be achieved and the procedures harmonized consistent with the due process clause in different ways.

At a minimum, this Court holds that no-fault insurance does not satisfy constitutional due process unless:

1. The Legislature and/or the Commissioner of Insurance (pursuant to his present rule-making authority, MCL 500.2484; MSA 24.12484), give substantial meaning to the statutory standards "Rates shall not be excessive, inadequate or unfairly discriminatory". See MCL 500.2403; MSA 24.12403; MCL 500.3340; MSA 24.13340.

2. A filed rate, or a rate determined on administrative or judicial review, provides and sets forth:

a) premiums reasonable to insured and insurer for the specific insurance coverage without regard to factors assertedly warranting differences in premiums among those insured;

b) the factors which properly may be considered by the insurer in differentiating premiums among those insured; and

c) the amount of differential appropriate for each such factor.

3. Such information for each insurer is publicized in such a manner that every person affected can readily ascertain the factors and amounts of differentials applicable to him and calculate the premium the insurer may charge.

4. Every motorist has the opportunity to obtain a prompt and effective administrative review of an insurer's calculation of the factors, differentials and premium applicable to him and a prompt and effective administrative review of the basis for the refusal or cancellation of insurance.

(4) Our holding the No-Fault Act's "compulsory insurance requirement" unconstitutional because of the inadequacies that exist in the present statutory system for making no-fault insurance available at fair and reasonable rates raises crucial jurisprudential and social considerations.

We are deeply aware that our holding not only directly affects the problems of motorists and the insurance business in this state, but that it also substantially affects our entire system of civil justice.

We also assume that, because of our otherwise constitutional approval of the general statutory schemata under the No-Fault Act (e.g., the personal injury protection insurance and property damage protection insurance schemata), the Legislature and the Commissioner of Insurance will seek to remedy the constitutional deficiencies articulated supra.

We therefore believe it best, for purposes of the general jurisprudence, the general welfare of the public, and the administration of justice in our state to hold the "compulsory insurance requirement" of the No-Fault Act unconstitutional (for the reasons articulated supra) effective as of 18 months from the issuance of this opinion.

At an appropriate time before 18 months from the issuance of this opinion, we will re-examine the constitutional status of the No-Fault Act in terms of remedying the present due process deficiencies. Any party or person wishing to file briefs or be heard shall make timely inquiry of the Clerk as to the proper procedure. This Court will take whatever action appears appropriate at that time.

During the interim period:

1) the Legislature and the Commissioner of Insurance may take whatever action they deem necessary to remedy the due process deficiencies articulated supra;

2) §§ 3101(1) and 3101(4) of the No-Fault Act will remain in effect, i.e., motorists will still be required to obtain no-fault insurance as a condition precedent to the registration and operation of a motor vehicle;

3) the No-Fault Act's constitutionally valid provisions, as decided in this opinion and subsequent opinions, will remain in effect.

Until there is legislative or agency response to the due process deficiencies articulated supra, the Commissioner of Insurance shall actively enforce the present regulatory scheme in the spirit of our opinion in order to assure the availability of no-fault insurance at fair and equitable rates during this period.

We also add that all rights accrued by individuals against their insurers or against the "Automobile Placement Facility" until the order in this case is entered remain valid.

IV.

Although we have held the No-Fault Act's "compulsory insurance requirement" unconstitutional because of insufficient due process protections, effective as of 18 months from the issuance of this opinion, we again emphasize our concurrent holding that "[d]uring the interim period * * * the No-Fault Act's constitutionally valid provisions, as decided in this opinion and subsequent opinions, will remain in effect". Accordingly, we now address the remaining issues in this case properly before us.

All the remaining issues involve due process and equal protection challenges to various statutory schemata of the No-Fault Act. At bottom, these issues are directed at the question of whether the Legislature constitutionally exercised its police power in enacting a particular statutory scheme. Because the constitutional framework employed and discussed with respect to the "compulsory insurance requirement" (i.e., the facial due process sufficiency of the protections provided in the act and other sections of the Insurance Code for available no-fault insurance at fair and equitable rates) was, conceptually, of a different constitutional nature, it is necessary that we discuss the applicable due process and equal protection tests for these remaining issues.

The test to determine whether legislation enacted pursuant to the police power comports with due process is whether the legislation bears a reasonable relation to a permissible legislative objective. See Michigan Canners v Agricultural Board, 397 Mich. 337, 343-344; 245 N.W.2d 1 (1976).

The test to determine whether a statute enacted pursuant to the police power comports with equal protection is, essentially, the same. As the United States Supreme Court declared in United States Dep't of Agriculture v Moreno, 413 U.S. 528, 533; 93 S Ct 2821; 37 L Ed 2d 782 (1973):

"Under traditional equal protection analysis, a legislative classification must be sustained, if the classification itself is rationally related to a legitimate governmental interest." (Citations omitted.)

In the application of these tests, it is axiomatic that the challenged legislative judgment is accorded a presumption of constitutionality. See Michigan Canners v Agricultural Board, supra, 343-344. What this "presumption of constitutionality" means, in terms of challenged police power legislation, is that in the face of a due process or equal protection challenge, "where the legislative judgment is drawn in question", a court's inquiry "must be restricted to the issue whether any state of facts either known or which could reasonably be assumed affords support for it". United States v Carolene Products Co, 304 U.S. 144, 154; 58 S Ct 778; 82 L Ed 1234 (1938). A corollary to this rule is that where the legislative judgment is supported by "any state of facts either known or which could reasonably be assumed", although such facts may be "debatable", the legislative judgment must be accepted. Carolene Products Co v Thomson, 276 Mich. 172, 178; 267 N.W. 608 (1936).

In accord with this axiomatic rule and its corollary a court may uphold the constitutionality of police power legislative judgments in the face of due process or equal protection challenge by taking judicial notice of indisputable, generally known or easily ascertainable facts. And, because the "presumption of constitutionality" is a rebuttable presumption, a party challenging the legislative judgment may attack its constitutionality in terms of purely legal arguments (if the legislative judgment is so arbitrary and irrational as to render the legislation unconstitutional on its face) or may show, by bringing to the court's attention facts which the court can judicially notice, that the legislative judgment is without rational basis.

There are, however, instances in which police power legislative judgments cannot be affirmed or rejected on the basis of purely legal arguments or indisputable, generally known or easily ascertainable facts which can be judicially noticed. In such instances, the facts upon which the existence of a rational basis for the legislative judgment are predicated "may properly be made the subject of judicial inquiry" (United States v Carolene Products, supra, 153). Thus, a court may require a trial so that it may establish adequate findings of facts to determine whether, on the one hand, plaintiffs have shown facts which reveal that the legislative judgment is without rational basis, or, on the other hand, whether there is any reasonable state of facts on the record which can be produced in support of the legislative judgment.

Such an approach is particularly necessary when the challenged police power legislation is important, complicated, novel or experimental legislation. Borden's Farm Products Co, Inc v Baldwin, 293 U.S. 194, 204, 210, 212; 55 S Ct 187; 79 L Ed 281 (1934). See also Pinnick v Cleary, supra, 34-37 (Tauro, C.J., concurring). As Chief Justice Hughes declared, writing for a unanimous United States Supreme Court in Borden's Co v Baldwin, supra:

"[W]here the legislative action is suitably challenged, and a rational basis for it is predicated upon the particular economic facts of a given trade or industry, which are outside the sphere of judicial notice, these facts are properly the subject of evidence and of findings. With the notable expansion of the scope of governmental regulation, and the consequent assertion of violation of constitutional rights, it is increasingly important that when it becomes necessary for the Court to deal with the facts relating to particular commercial or industrial conditions, they should be presented concretely with appropriate determinations upon evidence, so that conclusions shall not be reached without adequate factual support." (Emphasis added.) 293 U.S. 194, 210.

We believe that the No-Fault Act is substantively analogous in this respect to the legislation challenged in Borden's Co v Baldwin. The challenged rational bases for the legislative judgments under the act are "predicated" upon complicated statistics and actuarial facts of the motor vehicle insurance "trade" or business (which have substantial economic consequences). We believe, as did the Supreme Court in Borden's Co v Baldwin, that the "complexity of problems" inherent in a judicial determination of whether the legislative judgments of the No-Fault Act are constitutional, "makes it the more imperative that the Court in discharging its duty, in sustaining governmental authority within its sphere and in enforcing individual rights, shall not proceed upon false assumptions". 293 U.S. 194, 210-211. Thus, as Justices Stone and Cardozo stated in their concurring memorandum in Borden's Co v Baldwin:

"We are in accord with the view that it is inexpedient to determine grave constitutional questions upon a demurrer to a complaint, or upon an equivalent motion, if there is a reasonable likelihood that the production of evidence will make the answer to the questions clearer." 293 U.S. 194, 213.

This Court implicitly recognized this approach in Michigan Canners v Agricultural Board, supra. At issue in Michigan Canners were "important questions of first impression regarding the constitutionality and construction of the Agricultural Marketing and Bargaining Act, MCL 290.701 et seq.; MSA 12.94(101) et seq.". 397 Mich. 337, 340. The circuit court, however, dismissed the challenge on (erroneous) jurisdictional grounds. 397 Mich. 337, 342, 344-345. This Court declared:

"As mentioned above, plaintiff has raised important questions regarding the constitutionality and construction of the Agricultural Marketing and Bargaining Act without developing a factual record at trial which would help provide a context in which to consider these questions.

"To resolve these significant issues in such a factual vacuum would be imprudent where it appears that further factual development would substantially contribute to the proper disposition of the case.

"Such is the case here, especially in that Michigan Canners has claimed that the Bargaining Act is unconstitutional because it exceeds the police power of the state. This claim in particular requires full development of facts which might support or undermine the claim that the statute is an invalid exercise of the police power." 397 Mich. 337, 342-343.

Therefore, in the face of due process challenges to the legislative judgments of the No-Fault Act which resulted in various statutory schemata, our task is double-edged. First, we must determine from the record before us whether plaintiffs have overcome the presumption of constitutionality by showing facts which reveal that the legislative judgment is without rational basis, or, to the same effect, we must determine from the record whether the challenged legislative judgment is supported by any reasonable state of facts justifying its enactment. Second, we must then determine whether the legislative response bears a reasonable relation to this identified objective.

Similarly, our task is double-edged in considering equal protection challenges to the No-Fault Act. First, we must determine from the record before us whether plaintiffs have overcome the presumption of constitutionality by showing facts which reveal that the legislative judgment is without rational basis or, to the same effect, we must determine from the record whether the challenged legislative judgment is supported by any reasonable set of facts indicating that the legislative judgment is in the exercise of a legitimate governmental interest. Second, we must then determine whether the challenged statutory classifications which result from the legislative judgment are reasonably related to this legitimate governmental interest.

V.

The second issue before us is whether the No-Fault Act's personal injury protection insurance scheme violates the due process and equal protection clauses of the Michigan and United States Constitutions.

The features of the act's personal injury insurance scheme relevant to the resolution of the due process and equal protection challenges before us are:

1. The owner or registrant of a motor vehicle required to be registered in Michigan must maintain security for payment of benefits under personal injury protection insurance (§ 3101);

2. Tort liability arising from the ownership, maintenance or use within the State of Michigan of a motor vehicle is abolished with respect to accidental bodily injury except for non-economic loss "if the injured person has suffered death, serious impairment of body function or permanent serious disfigurement" (§ 3135[1]), intentionally caused harm to persons (§ 3135[2][a]), or damage in excess of the personal injury insurance benefits provided under the act (§ 3135[2][c]). However, tort liability arising from the ownership, maintenance or use within this state of a motor vehicle with respect to bodily injury is not abolished if the operator of the motor vehicle has not complied with the act's mandatory insurance requirements (i.e., if the person is uninsured) (§ 3135[2]);

3. The owner, registrant and operator of an insured vehicle who suffers accidental motor vehicle bodily injury in Michigan or in another state, whether he suffers this injury in his own vehicle or as an occupant of another vehicle or when he is not an occupant of a motor vehicle, is entitled to personal injury protection insurance benefits. The same is true for the "spouse and any relative" of the insured who is "domiciled in the same household" as the insured (§ 3114[1], see § 3110). However, an owner or registrant of a vehicle with respect to which the compulsory requirements of the act are not in effect (i.e., the uninsured Michigan motorist) is not entitled to personal injury protection insurance benefits.

In general, personal injury protection insurance under the act provides:

(a) all medical costs and expenses occasioned by injuries sustained in a motor vehicle accident, including expenses for rehabilitation (see § 3107[a]);

(b) reimbursement up to a maximum of $1,000 a month for loss of income resulting from a motor vehicle accident for a period not exceeding three years. This amount is applied pro rata for shorter periods of work loss. (This limit may be adjusted annually to keep pace with changes in the cost of living.) (§ 3107[b].) Personal injury protection insurance also provides up to $1,000 for funeral and burial expenses (§ 3107[a]);

(c) reimbursement for the cost of replacement of ordinary and necessary services "reasonably incurred", i.e., reimbursement of services the injured person would have performed not for income but for his own personal benefit or the benefit of his household if these services are shown to be "reasonably incurred". Under the act, an injured person may be reimbursed for such services up to a limit of $20 a day for a maximum period of three years. (This limit may be adjusted annually to keep pace with changes in the cost of living.) (§ 3107[b].) The family of the injured person may receive the same reimbursement should the injured person die. (§ 3108.)

(A) Due Process

Plaintiffs contend that the No-Fault Act violates due process by partially abolishing the common law remedy in tort for persons injured by negligent motor vehicle tortfeasors.

We disagree.

As noted supra, the Legislature need not provide an "adequate substitute" remedy before abolishing a common-law cause of action in tort; Mackin v Detroit-Timkin Axle Co, 187 Mich. 8, 13; 153 N.W. 49 (1915); Naudzius v Lahr, 253 Mich. 216; 234 N.W. 581 (1931); Silver v Silver, 280 U.S. 117; 50 S Ct 57; 74 L Ed 221 (1929). The abolition of a common-law tort remedy is measured by the traditional due process test, namely, whether the legislation bears a reasonable relationship to a permissible legislative objective. See discussion, Part IV, supra.

We believe that the abolition of the tort remedy for personal injury resulting from motor vehicle accidents was clearly justified by deficiencies in the tort system.

Testimony and documentary evidence presented at trial support the apparent legislative judgment that the tort system of reparations for automobile accident victims had several operational deficiencies:

1. A high percentage of persons injured in automobile accidents received no reparations under the tort system (to collect damages under this system the injured person must be free of any contributory negligence and the accident must be caused by a person who is adjudged to be at fault);

2. Minor injuries were over-compensated and serious injuries were under-compensated;

3. Lengthy delays existed under the tort system in compensating those injured in automobile accidents — often in cases where the need for prompt compensation was strongest;

4. The tort system imposed a heavy burden on the state's court system;

5. The tort liability system discriminated, in terms of recovery, against the uneducated and those persons on a low income scale.

The legislative response, the enactment of the no-fault personal injury protection scheme, reasonably relates to the purpose of correcting these evils. These provisions provide, inter alia, for payment without regard to fault within 30 days of claim for all reasonable medical and rehabilitation expenses, for wage loss and replacement services for a period of three years, for survivor's loss of support and services for three years. Such payments may substantially compensate all personal injury victims of motor vehicle accidents for economic loss, including the victims of motor vehicle accidents, who were, under the tort system, uncompensated or undercompensated for their economic losses. Prompt payment provided for under the act may remedy the delays under the tort system. By partially abolishing tort liability to those who suffer personal injuries as a result of motor vehicle accidents, the act may lessen the number of motor vehicle personal injury tort suits in the courts. The prompt availability of compensation for economic losses may relieve the under-educated or those with lower income from the pressure — "legal" or economic — to settle serious claims prematurely and for less than an equitable amount.

For these reasons, we hold that the personal injury protection insurance scheme under the No-Fault Act, in partially abolishing the common-law remedy in tort for persons injured by negligent motor vehicle tortfeasors, does not violate the due process clauses of the Michigan and United States Constitutions.

(B) Equal Protection

Plaintiffs contend that the No-Fault Act, by partially abolishing the common-law remedy in tort for persons injured by negligent motor vehicle tortfeasors, violates equal protection by creating two impermissible statutory classifications: (1) motor vehicle tortfeasors and their victims and all other tortfeasors and their victims; (2) victims of insured motor vehicle tortfeasors and victims of uninsured motor vehicle tortfeasors.

We disagree.

The treatment of motor vehicle tortfeasors differently from all other tortfeasors does not violate the traditional test for equal protection. Exhibits were introduced at trial to show that motor vehicle accidents have consistently and by a wide margin been the principal cause of accidental injury and death in Michigan. The State Police reported that in 1973 approximately 360,000 motor vehicle accidents occurred, resulting in 2,215 fatalities. The legislative judgment to limit its experiment in personal injury reparation to victims of accidents involving motor vehicles is justified by the predictably frequent and serious injury to persons and property resulting from the use of motor vehicles. See Williamson v Lee Optical Co, 348 U.S. 483, 489; 75 S Ct 461; 99 L Ed 2d 563 (1955).

Second, the creation of two classes of motor vehicle accident victims — victims of an insured motor vehicle tortfeasor who may not sue below the threshold and victims of uninsured motor vehicle tortfeasors who may sue — does not violate equal protection. This classification, along with penalties imposed by § 3102(2) may serve as an incentive for compliance with the compulsory insurance provision because an uninsured motorist may be liable in tort for all injury suffered by the victim. McKendrick v Petrucci, 71 Mich. App. 200, 207; 247 N.W.2d 349 (1976). It is significant in this regard that the Assigned Claims Facility is required to pay benefits to persons who may be injured by uninsured motorists. MCL 500.3171 et seq.; MSA 24.13171 et seq.

For these reasons, we hold that the No-Fault Act's incidental statutory classification between victims of insured motor vehicle tortfeasors and victims of uninsured motor vehicle tortfeasors does not violate the equal protection clauses of the Michigan and United States Constitutions.

VI.

The third issue before us is whether the No-Fault Act's property damage protection scheme violates the due process and equal protection clauses of the Michigan and United States Constitutions.

The features of the act's property damage insurance scheme relevant to the resolution of the due process and equal protection challenges before us are:

1. The owner or registrant of a motor vehicle required to be registered in Michigan must maintain security for payment of benefits under property damage protection insurance (§ 3101);

2. Tort liability arising from the ownership, maintenance or use within the State of Michigan of a motor vehicle is abolished with respect to property damage except for intentionally caused damage to property (§ 3135[2]);

3. Tangible ("non-moving") property owned by a third party injured as a result of a motor vehicle accident and motor vehicles parked in such a way as not to cause unreasonable risk of damage are entitled to property damage protection insurance benefits up to $1,000,000 against the insurer of the motor vehicle which inflicted the damage (§§ 3121, 3123[1][a]);

The following damaged property is not entitled to property damage protection benefits: the property of the insured, including the motor vehicle, and tractor attached thereto, or any property of the insured in his motor vehicle (§ 3123[1] subds [a], [b]). Also, property damage protection benefits are not payable for damage to (1) third-party motor vehicles which are parked in such a way as to cause an unreasonable risk of damage, or (2) non-vehicle property arising from out-of-state motor vehicle accidents (§ 3123).

Because property damage to an insured's own motor vehicle is not covered by property protection insurance benefits, the act requires insurers to offer optional first-party collision insurance to provide an insured reimbursement for such damage if he so chooses (§ 3037).

(A) Due Process

Plaintiffs and cross-plaintiffs contend that the No-Fault Act violates due process by abolishing the common-law remedy in tort for persons whose property is damaged by negligent motor vehicle tortfeasors.

We disagree.

Again, in resolving this due process challenge, we apply the traditional due process test, namely whether the legislation bears a reasonable relation to a permissible legislative objective.

The trial court found, and the record tends to support its conclusion, that the weaknesses of the tort system of compensation for personal injuries suffered as a result of motor vehicle accidents did not affect that system's compensation of property damage. Although the switch from property damage liability coverage to collision coverage may yield some increase in the efficiency of payments, it is apparent from a review of the record that the tort system provided relatively prompt, equitable compensation for damage to property resulting from motor vehicle accidents.

The analysis by the trial court and the Court of Appeals suggests that there must be an identifiable evil which the Legislature intends to correct. We do not believe this is constitutionally necessary. The Legislature is as free to experiment with other ways of dealing with a subject in the hope of making a good system better as it is to correct a perceived evil system.

The property damage section seeks to achieve several goals in addition to prompt, equitable and complete compensation.

Testimony at trial established that the Legislature anticipated that the abolition of a tort action for property damage would have at least four major effects ultimately resulting in lower and more equitable premiums.

First, with the shift from liability to collision insurance resulting from the abolition of tort liability, there would be a new emphasis on the value and repairability of the insured's own motor vehicle; rates would be calculated on the basis of repair costs for that vehicle, rather than, as in liability insurance, on the potential damage to a vehicle of unknown value.

Second, an additional anticipated effect of relating premium costs to the insured's car was that this system would create incentives for safer cars.

Third, the abolition of tort liability eliminates the necessity for accident investigations, because a determination of fault is irrelevant to the payment of compensation. The elimination of such investigations, it was hoped, would result in decreased administrative costs and resultant savings on insurance premiums.

Finally, by shifting from a liability to a no-fault system which emphasizes the risk to be insured, not the exposure to some unknown third party, the Legislature anticipated that group insurance would become feasible. Group insurance has been shown to be far less expensive to administer and more likely to result in lower costs. Furthermore, this potential for group insurance may draw large life and group insurance underwriters into the automobile insurance field, resulting in beneficial competition.

The fact that these effects are not yet evident does not diminish the legitimacy of the goals sought to be achieved or the reasonableness of the means adopted. At this early stage in the functioning of the No-Fault Act these long-term developments cannot yet fully be assessed. Indeed, this litigation itself, with its resulting uncertainty as to the viability of the No-Fault Act, may slow the achievement of the act's goals. Our decision in Manistee Bank, supra, is particularly relevant to this aspect of the case: it is precisely because regulation in the economic field often deals with long-term developments that the Court treats such legislation with great deference.

Plaintiffs and cross-plaintiffs emphasize that fault investigations have continued under the No-Fault Act. But that fact is not at this point a relevant consideration. Those investigations may be merely vestigial.

Similarly, plaintiffs and cross-plaintiffs emphasize the increase in collision premiums resulting from the enactment of No-Fault. Whether or not there has been such an increase and whatever the cause, the important consideration for this Court at this point is to determine whether there existed a permissible legislative objective reasonably related to the statute. We find that the No-Fault Act's property damage protection scheme meets this test and, accordingly, hold the property damage protection scheme does not violate due process.

(B) Equal Protection

Plaintiffs and cross-plaintiffs contend that the No-Fault Act violates equal protection by creating the following statutory classifications: (1) damage to vehicular property is not covered by any mandatory insurance under the act, i.e., property damage claims with respect to this kind of property are covered solely under optional first-party collision insurance, while (2) damage to tangible property and properly parked motor vehicles is covered by mandatory third-party (no-fault) property damage insurance up to $1,000,000 required to be carried by the motorist who inflicted the damage.

We disagree.

Again, as in the equal protection challenge to the personal injury section of the No-Fault Act, we apply the traditional equal protection test.

Plaintiffs' and cross-plaintiffs' equal protection complaint is, in essence, that the Legislature has violated equal protection in providing that persons whose vehicular property is damaged as a result of a motor vehicle accident are to be compensated only if they have chosen to purchase collision insurance. While, on the other hand, the Legislature provided that persons whose tangible property or properly parked motor vehicle is damaged as a result of a motor vehicle accident are to be compensated up to $1,000,000 through mandatory third-party (no-fault) property damage insurance required to be carried by the motor vehiclist who inflicted the damage.

In discussing this equal protection challenge to the property damage protection scheme, it is necessary to first logically analyze a basic misconception: no-fault and first-party insurance are misnomers in the context of property damage protection. It is not essential that every aspect of the no-fault scheme provide first-party protection, i.e., recovery by the victim from his own insurer. First-party protection is only one method of assuring prompt, equitable recovery.

Under the property protection scheme, owners of tangible property and properly parked motor vehicles collect from the insurer of the motor vehicle which inflicted the damage. Owners of moving or improperly parked motor vehicles may collect compensation from their own insurers, if they have chosen to self-insure.

The different treatment of moving vehicles and tangible property and properly parked vehicles is related to the second conceptual difficulty relating to the use of fault in a no-fault act. Common sense would indicate, and actuarial studies have shown, that in accidents involving motor vehicles and tangible property, the motor vehicle is usually at fault. Consequently, the act makes the motorist strictly liable for the damage he does to tangible property and requires him to purchase insurance for such damage.

The system, however, functions without regard to fault. That is, there is no determination in each accident of who was at fault. Thus, the appellation "no-fault" is a misnomer only if one concentrates on the initial legislative allocation of responsibility. However, if one looks at the operational effect of the act, it remains a system of insurance without fault.

Section 3121 of the No-Fault Act provides that property protection insurance benefits paid under one policy for all damage to tangible property resulting from an accident shall not exceed $1,000,000. This limit does not violate equal protection (nor due process). It appears from the record that the Legislature sought to limit the absolute liability of insurance companies. The choice of a $1,000,000 limit was justified from an actuarial standpoint.

For these reasons we hold that the No-Fault Act's classification of persons whose vehicular property is damaged as a result of a motor vehicle accident (who are compensated if they have chosen to purchase first-party collision insurance), and those persons whose tangible property or properly parked motor vehicles are damaged (who are compensated up to $1,000,000 through mandatory third-party, no-fault property damage insurance required to be carried by the motorist who inflicted the damage), does not violate the equal protection clauses of the Michigan and United States Constitutions.

VII.

The fourth issue before us is whether § 3101(2) of the No-Fault Act, in excluding two-wheel motor vehicles from coverage under the act, violates the equal protection clauses of the Michigan and United States Constitutions.

Section 3101(2) of the No-Fault Act provides:

"(2)`Motor vehicle' as used in this chapter, except for section 3103, means a vehicle, including a trailer, operated or designed for operation upon a public highway by power other than muscular power which has more than 2 wheels." (Emphasis added.) MCLA 500.3101(2); MSA 24.13101(2), as amended by 1975 PA 329.

The thrust of plaintiffs' complaint is that the No-Fault Act, by limiting coverage to those vehicles with "more than 2 wheels violates equal protection because it impermissibly treats owners of two-wheel vehicles (i.e., motorcycle owners) differently from owners of vehicles with more than two wheels.

We disagree.

The actuarial data in the record tends to show that motorcycles are rarely at fault in motor vehicle accidents. Also, there was extensive testimony to the effect that in accidents involving motorcycles the drivers and passengers of motorcycles are killed or severely injured at a rate twice exceeding that of those involved in automobile accidents. Thus the inclusion of motorcycles in a no-fault system would result in insurance premiums so high as to preclude most motorcyclists from purchasing insurance. We believe these are, for purposes of satisfying equal protection, legitimate governmental interests. The exclusion of motorcycles from coverage under the No-Fault Act is, quite evidently, reasonably related to these legitimate interests.

We therefore hold that § 3101(2) of the No-Fault Act, in excluding two-wheel vehicles from coverage under the act, does not violate equal protection.

VIII.

The fifth issue before us is whether the No-Fault Act's statutory scheme with respect to work-loss reimbursement and reimbursement for replacement services, § 3107, violates the equal protection clauses of the Michigan and United States Constitutions.

The thrust of plaintiffs' constitutional complaint is § 3107 violates equal protection: (A) because it invidiously discriminates between workers in the home and workers outside the home in terms of maximum benefits payable in case of injury; and (B) because it creates an arbitrary statutory classification by restricting recovery for injuries to those employed in the home to expenses "reasonably incurred" for replacement services.

The trial court held that (A) "the classification * * * between those who work for compensation and those who do not work for compensation inside the house is [not] so invidious as to strike it down under the Equal Protection Clause"; (B) "that portion of § 3107(b) requiring that the cost of replacement services must be incurred and subsequently reimbursed is unconstitutional as violative of the Equal Protection Clauses of both the Fourteenth Amendment and the Michigan Constitution". The Court of Appeals did not consider this issue on the merits.

At the threshold we observe that the trial court, in deciding this twofold issue, did not hear testimony. Rather, the court based its decision on "stipulations of fact * * * entered into at the pretrial conference".

In Part IV, supra, we ruled that as a matter of constitutional policy, in constitutional challenges to the legislative judgments under the No-Fault Act, this Court requires, at a minimum, that evidence be produced at trial to provide an adequate factual context which might either support or undermine the claim that the legislative judgment in question is an invalid exercise of the police power.

Although the trial court did make its decision on the basis of the noted "Stipulations of Facts", we do not feel these stipulations provide an adequate factual context in which we can decide the difficult equal protection issues raised regarding § 3107. For example, the stipulation that "there are times when a person working within a home performs services that are equal to the services of those working outside the home, and who are not compensated to the same extent as those working outside the home" does not indicate whether this happens 90% or 10% of the time. This is a factual determination which could, obviously, present an important consideration. And, the stipulation that "there is at least one person in the State of Michigan who would be unable to [obtain such services on credit] and who does not have the [cash to pay for them]" gives rise to the response, "De minimis non curat lex" ("The law is not based on minimal considerations").

Therefore, we deem it necessary to remand to the trial court so that evidence relevant to the constitutionality of this two-fold issue may be received by that court and constitutionally adjudged in accord with the "traditional" equal protection test articulated in Part IV, supra.

We retain jurisdiction as to this issue.

IX.

The sixth issue before us is whether the No-Fault Act's statutory schemata with respect to nonresident, out-of-state motorists, § 3102(1), which require nonresident motorists to maintain no-fault insurance when they are in Michigan "an aggregate of more than 30 days in any calendar year"; and § 3113, read inter alia with § 3135(2), which pertains to transient nonresident motorists, violate the due process and equal protection clauses of the Michigan and United States Constitutions.

The trial court held:

"The Court finds § 3102 (1) not violative of either the Due Process or Equal Protection Clauses of the Fourteenth Amendment, or those of the Michigan Constitution. The difference in the treatment of out-of-state motorists in Michigan an aggregate of 30 days in any one year is reasonably related to the essential purposes of the act and is not arbitrary and discriminatory. No invidiously discriminatory classification is established."

The trial court also held "the provisions of § 3113(c) denying a nonresident transient recovery of personal protection insurance, and also depriving such transient of tort recovery below the threshold, is invalid". The court reasoned that "[the] disparate treatment of resident and nonresident motorists, and their passengers, violates the due process and equal protection standards discussed earlier in this opinion". The court then stated, correctly, that "[t]here was no evidence offered that such disparate treatment was reasonably related to any proper legislative purpose, nor was any evidence offered to justify the classification" (emphasis added).

In the lengthy and extraordinary trial in this case, neither plaintiffs nor defendants developed an adequate factual record with respect to the statutory schemata pertaining to nonresident motorists. We cannot, as a matter of policy, allow the disposition of these constitutional challenges to succeed or fail on that basis.

Therefore, we remand to the trial court so that evidence relevant to the constitutionality of the above schemata may be received by that court and constitutionally adjudged in accord with the "traditional" due process and equal protection tests articulated in Part IV, supra.

We retain jurisdiction as to this issue.

CONCLUSION

The Court of Appeals and the trial court are affirmed in part and reversed in part as indicated by our holdings in this opinion's individual parts.

An appropriate order reflecting the constitutional status of the No-Fault Act will enter 18 months from the issuance of this opinion. GCR 1963, 866.3(b).

No costs, a public question being involved.

KAVANAGH, C.J., and LEVIN and BLAIR MOODY, JR., JJ., concurred with WILLIAMS, J.