Michigan Supreme Court Limits No-Fault PIP Liability for Out-of-State Vehicles and Their Insurers

Adam C. Zwicker By Adam C. Zwicker

On January 29, 2021, the Michigan Supreme Court decided, Turner v. Enterprise Leasing Corporation of Detroit, LLC, __ Mich __ (Docket No. 159660) (2021), and held that a self-insured rental car company was not responsible for Michigan No-Fault auto insurance “PIP” benefits (coverage for medical bills, wage loss, etc. that are usually paid by a driver’s own insurance company), because its rental car had been operated in the state less than 30 days in a year and thus was not required to be registered in Michigan.

The case applies to claims involving accidents that pre-date June 11, 2019. Before that date, an out-of-state resident involved in a Michigan accident was eligible for No-Fault PIP benefits if they were driving a vehicle that was registered in Michigan or insured by an insurance company that was authorized to write auto insurance in Michigan, even if the policy was issued in another state.  After June 11, 2019, an out-of-state driver involved in a Michigan accident is not entitled to Michigan PIP benefits if he or she “was not a resident of [Michigan], unless the person owned a motor vehicle that was registered and insured in [Michigan].”

Based on this decision, in cases involving out-of-state truck drivers that are injured in accidents in Michigan before June 11, 2019, the driver is eligible for PIP benefits if the truck he or she was driving was insured by an insurance carrier that was authorized to write auto insurance in Michigan. In such a case, the PIP benefits would be paid by the trucking company’s insurer under the “employer-provided vehicle” rule. (See MCL 500.3114(3)). For accidents after June 11, 2019, such a driver is not eligible for PIP benefits – even if the truck he or she was driving was insured by a insurer authorized to write insurance in Michigan – unless the driver registered and insured a car in Michigan for some reason.

Michigan No-Fault issues are complex, and No-Fault reforms that went into effect in mid-2020 create additional intricacy to an already esoteric field of law. Gallagher Sharp’s Michigan attorneys are ready to assist with any Michigan No-Fault issues that the trucking industry and its insurers encounter.