Accident With a Borrowed Car in Michigan: What Happens?
The answer isn’t straightforward — it depends on whether you gave permission, who was at fault, and whether the vehicle was being used for work-related activities.
Becky Helzer is an editor at Insurify. She loves helping writers express their ideas clearly and authentically. With a diverse background in editing everything from curriculum and books to magazine articles and blog posts, she’s worked on topics ranging from home finance, insurance, and cloud computing to the best tools for home improvement.
A proud graduate of Colorado State University with a degree in technical journalism, Becky lives in Fort Collins, CO, with her husband and their two spoiled rescue dogs.
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In Michigan, as in other states, car insurance follows the car, not the driver.[1] So if someone else crashes your car while driving, your insurance typically covers the damage.[2] But it’s not always that clear. Coverage depends on whether you gave the driver permission, what they were using the car for, and the type of insurance you carry.
It’s a lot to process when dealing with the stress of a crash. Learn what happens if someone else is driving your car and gets in an accident in Michigan, what legal responsibilities you might face, and when it’s smart to call an attorney.
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What happens if the person driving your car causes the accident
In Michigan, the law assumes you’ve given permission when an immediate family member drives your car. If your spouse, father, mother, brother, sister, son, daughter, or other close relative drives your car, your insurance typically covers damages resulting from an accident.
If you gave the driver permission to borrow your car
If you let someone drive your car, your auto insurance typically applies under “permissive use.” But your insurer may deny a claim if you didn’t permit someone to drive your car. In Michigan, permission can be explicit — you tell them directly — or implied, like when your teen regularly uses your car to get to work and you’ve never said no.
If you didn’t give the driver permission to borrow your car
If someone takes your car without permission, or you didn’t add them to your policy, your insurance company will likely deny a claim. The unauthorized driver is responsible for your vehicle’s damage and any third-party damages. You may struggle to recoup your costs if they don’t have insurance or enough money to pay for the damage.
If the borrower used your car for business purposes
Most personal auto insurance policies in Michigan don’t cover accidents that happen during business activities.[1] So if a friend or family member uses your car to deliver pizzas or drive for Uber, your insurer will unlikely pay for any damages in an accident.
If another driver hits your car while someone else is driving it and causes injuries, your insurance can cover those medical bills. Michigan is a no-fault state, meaning your own insurance pays the medical expenses for anyone in your car, no matter who caused the accident, as long as the person driving had your permission.
This applies even if an uninsured driver caused the accident. In that case, your uninsured and underinsured motorist coverage may pay for the driver’s expenses if the at-fault driver has no insurance or insufficient coverage. If the injuries are severe, the driver can file a lawsuit against the at-fault driver’s insurance to help pay for their pain and suffering.
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Why your insurance company might deny a claim when someone else is driving your car
Even the best Michigan car insurance companies may deny a claim when someone else crashes your car. First, permission matters. If someone takes your car without asking, your insurer may refuse to cover any damages. Also, if someone uses your vehicle for business purposes — like driving for DoorDash or Lyft — your insurance won’t cover an accident, even if you gave permission to drive your car.
Your insurance company can also deny coverage if the driver is specifically excluded from your policy or your friend with a suspended license gets behind the wheel.
One of the trickiest situations is negligent entrustment. This is when you give permission for someone to drive your car who is intoxicated, incompetent, or reckless. Your insurer can deny a claim if you let someone drive your car in this situation.
Accident with a borrowed car FAQs
Allowing someone else to drive your vehicle raises several confusing scenarios. The answers to these frequently asked questions can provide more information.
Can you sue a friend for crashing your car?
Generally, no, since Michigan is a no-fault state. But Michigan’s “mini-tort” law lets you sue the other driver for up to $3,000 to recover your deductible if they’re responsible for causing the accident.
Who’s liable in a car accident in Michigan: the owner or the driver?
It depends. If the person borrowing your car has your permission to drive, your insurance will likely cover the damage. But if they don’t have your permission, your insurer can deny the claim, and the driver may be personally responsible for the car accident.
Does insurance follow the car or the driver in Michigan?
Insurance follows the car in Michigan. Your policy covers your vehicle and whoever’s behind the wheel, as long as you gave them permission to drive your car.
Can you just get into anyone’s car and drive it in Michigan?
No. You need explicit or implied permission from the car’s owner to legally drive their vehicle. Taking someone’s car without permission could lead to denied claims or even criminal charges.
Amy is a personal finance and technology writer. With a background in the legal field and a bachelor's degree from Ferris State University, she has a talent for transforming complex topics into content that’s easy to understand. Connect with Amy on LinkedIn.
Amy has been a contributor at Insurify since September 2023.
Becky Helzer is an editor at Insurify. She loves helping writers express their ideas clearly and authentically. With a diverse background in editing everything from curriculum and books to magazine articles and blog posts, she’s worked on topics ranging from home finance, insurance, and cloud computing to the best tools for home improvement.
A proud graduate of Colorado State University with a degree in technical journalism, Becky lives in Fort Collins, CO, with her husband and their two spoiled rescue dogs.
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