Accident With a Borrowed Car in Michigan: What Happens?

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.

What happens if the person driving your car causes the accident

Even if you weren’t behind the wheel, your liability coverage pays for third-party damages in an at-fault accident. If you have full coverage, your collision insurance pays for your car’s repairs or provides a payout if it’s totaled.3

What happens if the other driver is at fault

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.

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