Will No-Fault Insurance Cover a Borrowed Car In An Accident?

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If A Borrowed Car Gets In A Car Accident, Will No-Fault Insurance Cover it?

A person gets in to a car crash. The person sustains injuries and believes she is entitled to compensation for those injuries. But what if the person borrowed the car?  Are you still entitled to compensation then?

Assuming the person had permission to borrow the vehicle, the answer is yes. Under the Michigan no-fault law, a person involved in a motor vehicle accident is entitled to generous benefits. These benefits include the payment of medical expenses, lost wages, reimbursement for out-of-pocket costs and prescriptions and even in-home care.

If the other driver is at least 50% at fault for causing the accident, the accident victim is also entitled to pain and suffering compensation.

However, there are certain exceptions. One of the main exception involves the “unlawful taking” of a motor vehicle.  MCL 500.3113(a) states: A person is not entitled to PIP benefits for accidental bodily injury if at the time of the accident any of the following circumstances existed: (a) The person was using a motor vehicle or motorcycle which he or she had taken unlawfully, unless the person reasonably believed that he or she was entitled to take and use the vehicle …

So if you were given permission to use the vehicle, in almost all circumstances, you will be provided access to the same generous benefits car owners and passengers are entitled to following a crash.

For example, say you are visiting your uncle’s house and while there, he asks you to got to the store to pick up some groceries. While on the way to the store, you are involved in a car accident. Because your uncle gave you permission to use the vehicle, you are entitled to Michigan no-fault benefits. This is true even if you did not own a car or have car insurance yourself. You are even entitled to benefits if the borrowed car was not insured.

Like anything under the law, there are some caveats. If the borrowed vehicle was a vehicle you regularly used and had access to (for example, you had your own set of keys, the car mostly stayed at your residence), then you may be a constructive owner.  If you are a constructive owner, the vehicle you occupied must be insured for you to have access to no-fault benefits.

Another caveat is whether the vehicle was stolen or not. If you borrowed a vehicle, but did not know the vehicle was a stolen car, you are still entitled to benefits because you reasonably believed you were entitled to use the vehicle. But if you borrowed a stolen vehicle, and knew the vehicle was stolen, then you won’t have access to Michigan no-fault benefits.

Still, in almost all situations, so long as you had permission to use the borrowed vehicle, you are entitled to no-fault benefits.

The Michigan car wreck attorneys at the Lee Steinberg Law Firm, P.C. fight to get their clients the money and respect they deserve. If you have a question about the Michigan no-fault law, or Michigan car accidents in general, please call LEE-FREE at 1-800-LEE-FREE (1-800-533-3733) so we can answer your questions. There is no fee unless we get money for you.