You could lose the right to collect No Fault insurance benefits and even the right to sue an at-fault driver who injures you in a car wreck if you continuously possess, drive and maintain a car that you own
Do you own the car you’re driving?
If so, then you need to make sure you have a valid auto No Fault insurance policy on that vehicle.
If you don’t have insurance, you are an uninsured driver. While there are hundreds of thousands of people driving cars without insurance these days — it even has its own name of “driving dirty” in Detroit where approximately 50% of drivers do not have insurance — the reality is that no state in the nation has more draconian penalties for people who are injured in car accidents while driving uninsured.
Failure to have auto insurance on the car you own will render you an “uninsured” driver under Michigan’s auto law, and expose you to a host of disastrous and financially costly consequences, including, but not limited to, the following:
- Being disqualified from collecting No Fault medical benefits and, thus, being forced to pay for all of your own medical bills.
- Being disqualified from collecting No Fault wage loss benefits.
- Being disqualified from receiving No Fault Mini Tort coverage for vehicle damage.
- Being disqualified from suing for pain and suffering compensation.
- Being sued and held personally liable to pay for another person’s No Fault medical and wage loss benefits.
- Criminal charges.
- Driver’s license suspension.
What is a vehicle owner under Michigan’s auto law?
In fairness, whether someone is or is not a vehicle owner can be confusing for people. Tragically, far too many people don’t realize they meet the definition of vehicle owner until it’s too late … until after they’ve been injured in a car accident and they’re in desperate need of No Fault benefits to help them survive and piece their lives back together. Or they have been hurt through another person’s carelessness and negligence, and they discover they are barred from bringing a lawsuit for their injuries and pain and suffering under Michigan law.
The Michigan Court of Appeals’ recent ruling in Frankenmuth Mutual Insurance Company v. Zaguroli reinforced how important this “owner” issue is and clarified the two important questions that all Michigan drivers need to ask — and answer:
- Am I the “owner” of the vehicle I’m driving?
- Given my “owner” status, have I secured the proper legally required No Fault auto insurance for the vehicle?
In Zaguroli, the Court of Appeals concluded that a non-title-holding driver’s use of a motor vehicle made him the vehicle owner and, thus, he was disqualified from receiving No Fault benefits because he had not secured the auto insurance coverage required under Michigan law.
What does being a vehicle owner have to do with auto insurance?
Under Michigan’s No Fault Law, the owner of a Michigan-registered car or truck must obtain a No Fault auto insurance policy for the vehicle. In other words:
- The “owner … of a motor vehicle required to be registered in this state shall maintain security for payment of [No Fault] benefits under personal protection insurance, property protection insurance, and residual liability insurance.” (MCL 500.3101(1))
The No Fault law provides that a “person is not entitled to be paid personal protection insurance benefits for accidental bodily injury if at the time of the accident”:
- “[T]he person was the owner or registrant of a motor vehicle involved in the accident with respect to which the security required by section 3101 [i.e., No Fault insurance] … was not in effect.” (MCL 500.3113(b))
Who is a vehicle owner under Michigan’s No Fault Law?
A driver can be the “owner” of the car or truck she’s driving if either of the following conditions are met:
- She has “the use of [the] motor vehicle … for a period that is greater than 30 days.” (MCL 500.3101(k)(i))
- She “holds the legal title to [the] motor vehicle …” (MCL 500.3101(k)(iii))
In Zaguroli, the Court of Appeals concluded that a non-title-holding driver was the vehicle owner because:
- “[T]he evidence established that [he] exclusively and continuously possessed, drove, and maintained the vehicle from shortly after his mother died in 2010 until the time of this accident in 2014 …”
- “Although [he] was not the title holder, he was the only person ‘having the use of a motor vehicle, under a lease or otherwise, for a period that is greater than 30 days …’ MCL 500.3101(2)(k)(i). [He] kept the vehicle at his residence, drove the vehicle on a daily basis to work and for personal errands, and serviced as well as maintained the vehicle — for years. … In other words, he used the vehicle in ways that comported with the concepts of ownership and was the only person to do so.”
- “Because [he] is considered the only owner of the vehicle for purposes of the no-fault act, and he did not have insurance on the vehicle at the time of the accident as required under MCL 500.3101(1), he is precluded from receiving PIP benefits under MCL 500.3113(b).”
Who cannot be a vehicle owner under the No Fault law?
A person who was deceased before a car crash occurred cannot be treated as the “owner” of the car involved in the crash for purposes of No Fault benefits.
In Zaguroli, the court concluded that an alleged “owner” was no owner at all because:
“[H]e was deceased and had been deceased for months before [the victim who was seeking No Fault benefits] was in the accident. … [The No Fault] statutory [“owner”] provisions cannot be met when a person who is claimed to be an ‘owner’ under the no-fault act died months before the accident at issue.”