The short answer, by coverage
| Coverage | Generally follows | What it means |
|---|---|---|
| No-fault PIP (medical, wages, household help) | The person | Your own policy, or a spouse’s or resident relative’s, pays you first, even in someone else’s car (MCL 500.3114(1)). |
| Bodily injury and property damage liability | The car | The owner’s policy covers a driver the owner allowed to use the car, for harm caused to others. |
| Property protection (PPI) | The car | Pays for damage the car does in Michigan to buildings and parked cars. |
| Collision and comprehensive | The car | Pays to repair the insured car, whoever was driving, if the owner bought it. |
Your injuries: your household policy
For no-fault benefits, Michigan looks first at the injured person’s own policy, then a spouse’s, then one owned by a relative who lives with you (MCL 500.3114(1)). That’s true whether you were driving your car, a friend’s car or a rental. If no one in your household has a policy, most injured passengers and drivers apply through the Michigan Assigned Claims Plan. There are exceptions for employees in employer vehicles, bus and taxi passengers, and motorcyclists. See which insurer pays.
Harm to others: the car’s policy
When a driver causes a crash, the injured people’s claims for pain and suffering and excess losses go first against the liability coverage on the car. Michigan’s owner liability statute makes an owner responsible for the negligence of someone they let drive (MCL 257.401), and the owner’s policy generally covers that permitted driver. If the driver has their own policy, it may add coverage on top. That’s why finding every policy matters: see how much insurance the other driver has.
Out-of-state cars
An insurer that is authorized to do business in Michigan must provide Michigan’s required coverages when a vehicle it insures is involved in a crash here, even if the car is registered in another state (MCL 500.3163). Insurers sometimes rely on another state’s exclusions to cut what they pay. In one of Justin Grove’s cases, an insurer said a Virginia exclusion kept a $1,000,000 umbrella policy from applying because the owner’s son was driving. Justin argued that because the crash happened in Michigan the exclusion didn’t apply, filed suit, and the insurer tendered both policies in full. Read that case result. Every policy and case is different.
Excluded drivers
A Michigan policy can name a specific person as an excluded driver. If that person drives the car anyway, the policy generally won’t cover the harm they cause (MCL 500.3009). If you were hurt by an excluded driver, other coverage may still be available, including your own uninsured motorist coverage. See uninsured and underinsured motorist claims.
Insuring a car that isn’t in your name
Michigan requires the owner or registrant of a car to insure it (MCL 500.3101). Whether an insurer will write a policy for someone who doesn’t own the car is the insurer’s decision. The safer setup is for the titled owner to be the named insured, with every regular driver listed and the correct address where the car is kept.
Getting this wrong is one of the most common reasons insurers deny claims after a crash: they say the application misstated who owned the car, where it was kept or who drove it, and try to rescind the policy. See fraud claims and policy rescission.
After a crash in a borrowed, rented or out-of-state car, send written notice to every insurer that might owe benefits within one year, so a fight between insurers doesn’t cost you your claim. If an insurer says a policy doesn’t apply, have the policy reviewed before you accept that answer.
Sources: MCL 257.401; MCL 500.3009; MCL 500.3101; MCL 500.3114; MCL 500.3163; MCL 500.3145. General information, not legal advice; coverage depends on the policy language.
Questions people ask us
Does insurance follow the car or the driver in Michigan?
Both, depending on the coverage. Your no-fault (PIP) benefits generally follow you: your own household policy pays your medical bills and lost wages even when you were in someone else’s car. Liability, collision and comprehensive coverage follow the car: the owner’s policy generally covers a driver the owner allowed to use it.
If I borrow a friend’s car and crash, whose insurance pays?
For your own injuries, your household’s auto policy pays your no-fault benefits; if no one in your household has one, the claim generally goes to the Michigan Assigned Claims Plan. For injuries you cause to others, your friend’s liability coverage generally comes first. For damage to your friend’s car, your friend’s collision coverage applies, if they have it.
Can I insure a car that is not in my name in Michigan?
Michigan puts the duty to insure on the car’s owner or registrant. Whether an insurer will write a policy for someone who doesn’t own the car is up to the insurer, and many won’t. Never list the wrong owner, address or regular drivers to get a policy: insurers use those misstatements to cancel policies and deny claims after a crash.
Does Michigan coverage apply to an out-of-state car?
Often, yes. Insurers authorized to sell insurance in Michigan must provide Michigan coverage when a vehicle they insure is involved in a crash here (MCL 500.3163). Exclusions written under another state’s law may not hold up for a Michigan crash, so have the policy reviewed.