One of the questions I get all the time as a car accident lawyer is: “Can someone else drive my car and be covered on my insurance?”
And, as a lawyer, my answer always begins with (eye roll): “It depends . . .”
The answer to “can someone else drive my car and be covered on my insurance?” depends on what happens, whether they or someone in their family has auto insurance and what types of insurance coverage were covering the car in question.
Below I will discuss the most common scenarios along with their car insurance coverage implications.
What if someone else drives my car and gets in a car accident and has medical bills and lost wages?
If someone else drives your car and gets in a car accident he or she can collect auto No-Fault benefits (which would pay for accident-related medical expenses and lost wages if someone is too injured to return to work) through his or her own auto insurance policy. This is how it will work if he or she is the named insured on the policy, or through a policy belonging to a spouse or a resident relative. (MCL 500.3114(1)) If No-Fault insurance coverage is not available through these three sources, then he or she would apply for benefits through the Michigan Assigned Claims Plan. (MCL 500.3114(4))
There are, of course, always exceptions. In the case of when another person operates your car, there are three exceptions:
- Joyriding: No-Fault benefits are not available if someone else drives your car “willingly” even though he or she knew or should have known your car “was taken unlawfully.” (MCL 500.3113(a))
- Driver is from out-of-state: If someone else drives your car and that person is from out-of-state, then Michigan No-Fault benefits are not available unless he or she “owned a motor vehicle that was registered and insured in this state.” (MCL 500.3113(c))
- Driver is excluded: If another person operates your car and that person was named as an “excluded operator” under MCL 500.3009(2), then No-Fault benefits are not available.
Can the person operating my car bring a lawsuit for pain and suffering if they are hurt in a car accident?
Yes. If another person is operating your car who is seriously injured in a car accident and is not at-fault then he or she can sue the at-fault driver for all harms and losses (including pain and suffering damages) caused by that negligent, at-fault driver.
In order to win a car accident injury lawsuit and be able to recover money compensation for his or her injuries, he or she will have to prove that he or she suffered a “serious impairment of body function,” which is the No-Fault law’s threshold requirement for tort liability lawsuits seeking “noneconomic loss” damages. (MCL 500.3135(1), (3)(b) and (5))
What if someone else drives my car and damages another person’s car?
The Michigan mini tort law will limit the person’s liability – in the event that he or she was at-fault in causing a car accident that damaged someone else’s car – to $1,000. However, the mini tort liability limit will increase to $3,000 for accidents after July 1, 2020. (MCL 500.3135(3)(e))
What if someone else drives my car and injures or kills someone in a car accident?
It’s important to note that under Michigan’s “owner liability” law, so long as someone else drives your car with your “express or implied consent or knowledge,” then you will be held “liable for an injury caused by the negligent operation of the motor vehicle.” (MCL 257.401(1))
That means before you let anyone borrows your keys you need to make sure they are a safe driver. If you are letting an unsafe person operate your car and he or she seriously injures or kills someone, you can and will be sued.
Michigan’s No-Fault law requires all motor vehicles to carry “residual liability insurance” which covers liability for personal injury, death or property damage resulting from a car accident. (MCL 500.3101(1); 500.3131(1)) This means that if your vehicle is involved in a car accident that results in someone’s death or their suffering a “serious impairment of body function” (MCL 500.3135(1)), then liability insurance coverage will help you to pay any damages that you are deemed to be liable for.
If the injuries or a wrongful death caused by the car accident exceed the policy limits of your own residual bodily injury liability insurance coverage, then the person to whom you lent the vehicle – and you – could both also be personally liable.
As of today, drivers are required to carry liability insurance coverage limits of $20,000/$40,000/$10,000 for bodily injury or death and property damage. For accidents after July 1, 2020, the limits will increase to $250,000/$500,000 – unless drivers specifically opt for the lower limits of $50,000/$100,000. (MCL 500.3009(1), (5) and (8)) Purchasing higher liability insurance coverage is not very expensive. If you know someone else may be operating your car, it’s worth paying a little bit more to have higher insurance coverage limits to protect you and your family.
It is important to note that if you loan your car to someone who is named as an “excluded driver” on your policy, then all liability insurance coverage will be denied in the event he or she causes a car accident – although the vehicle’s owner (i.e., you) and the “excluded driver” will “remain fully personally liable.” (MCL 500.3009(2))
What if another person operating my car bangs it up?
If you have collision insurance coverage on your vehicle, then that will pay for your vehicle damage repair costs. Plus, as I wrote above, you may also still be able to file a mini tort claim against the at-fault driver to cover your collision deductible.
If you do not have collision coverage, then you will likely need to pursue a mini tort claim against the at-fault driver to collect up to $1,000 in damages – or up to $3,000 for car accidents after July 1, 2020.
What if someone else drives my car and destroys another person’s property?
If someone else drives your car and destroys another person’s property then the Property Protection Insurance coverage that everyone who operates a vehicle in Michigan are required to carry on their vehicles will cover “accidental damage to tangible property” which “consists of physical injury to or destruction of the property and loss of use of the property so injured or destroyed.” (MCL 500.3121(1) and (3))
Specifically, PPI insurance, which is provided “without regard to fault,” covers up to $1 million for: (1) damage to “vehicles and their contents” so long as they are unoccupied and “parked in a manner as not to cause unreasonable risk of the damage which occurred”; and (2) damage to fences, trees or types of tangible property. (MCL 500.3121(2) and (5); 500.3123(1)(a))