Eligibility for benefits and determining who pays for crashes involving rental cars
If an uninsured Michigan resident has been injured in an out-of-state rental car accident, the self-insured rental car company will be responsible for paying the accident victim’s Michigan No-Fault benefits.
However, for that to be true, two very important, legally significant facts must exist:
- The rental car accident victim must be entitled to receive Michigan No-Fault insurance benefits, also known as “PIP” or personal injury protection benefits.
- The rental car company that rented the car to the victim must be an “insurer” that is first in “priority” to pay No-Fault insurance benefits.
The No-Fault insurance entitlement prong
Under Michigan’s No-Fault Law, an uninsured Michigan resident who is injured in an out-of-state rental car accident will be entitled to No-Fault benefits if:
- The accident occurred “within the United States, its territories and possessions or in Canada …”
- And, the owner or registrant of the rental car “was insured under a personal protection insurance policy or has provided security approved by the secretary of state under subsection (4) of section 3101.” (MCL 500.3111).
Frequently, in the case of self-insured rental car companies, “security,” rather than “a personal protection insurance policy,” is what is provided.
In that situation, “security” is understood to mean “any … method [other than being insured under an insurance policy] approved by the secretary of state as affording security equivalent to that afforded by a policy of insurance, if proof of the security is filed and continuously maintained with the secretary of state throughout the period the motor vehicle is driven or moved upon a highway.” (MCL 500.3101(4))
Accordingly, self-insured entities that provide the “security” required by the No-Fault Law are, for purposes of the No Fault Law, considered “insurers.” (MCL 500.3101(4))
Priority to pay for rental car companies
For the uninsured Michigan resident who was injured in an out-of-state car accident involving a rental car, and who is entitled to receive Michigan No-Fault benefits, the “insurer” with the highest “priority,” i.e., responsibility or obligation to pay No Fault PIP benefits is the self-insured rental car company.
Under Michigan’s No-Fault Law, the “insurer of the owner or registrant of the vehicle occupied” has the top priority to pay No-Fault benefits to injured occupants who are not otherwise insured. (MCL 500.3114(4)(a))
As such, because the rental car company is self-insured and has, presumably, provided the “security” required by the No Fault Law, the self-insured rental car company is considered the “insurer” of the rental car.
Michigan No-Fault benefits
An auto accident victim may be entitled to the following No-Fault insurance benefits:
- Unlimited medical benefits so long as they are reasonably necessary for the victim’s care, recovery and rehabilitation;
- Wage loss benefits for 3 years;
- Attendant care (in-home nursing care);
- Replacement services (help around the house) for 3 years.
- Steve Gursten is an experienced insurance lawyer at Michigan Auto Law, Michigan’s largest law firm specializing in serious automobile accidents. Steve wrote the book, Guide to Michigan No-Fault Law.
Michigan Auto Law is the largest law firm exclusively handling car accident, truck accident and motorcycle accident cases throughout the entire state. We have offices in Farmington Hills, Detroit, Ann Arbor, Grand Rapids and Sterling Heights. Call (800) 777-0028 to speak with one of our lawyers.