Don’t think you can just take a family member’s car without permission and be fully covered by insurance in an accident, especially if you’re in Michigan. That’s the takeaway from the decision in two Michigan Supreme Court cases handed down last week.
The Michigan Supreme Court decided July 31 that two separate cases involving two different drivers who borrowed “a car without permission but without meaning to steal it” and then crashed should not be eligible for Michigan auto insurance benefits. Both of the insurers of the borrowed cars claimed they did not have to pay the rogue drivers personal injury protection (PIP) benefits because the cars were taken “unlawfully.” According to court documents, PIP benefits do not have to be paid if the driver of the car had taken the vehicle “unlawfully, unless the person reasonably believed that he or she was entitled to take and use the vehicle.”
In one case, the state’s “family joyriding exception” was used by the lower court as a reason the injured should still be covered. In another, the “chain of permissive use” theory was used to argue for coverage. In both cases, the Supreme Court disagreed with the exceptions and upheld the insurers’ rights to deny the claims for coverage.
Progressive Marathon Insurance v. DeYoung
In Progressive Marathon Insurance v. DeYoung, Ryan DeYoung took his wife’s car without permission and got into an accident while driving drunk, leaving him with injuries. Not only had he been forbidden from driving the car by his wife, but he had not had a driver’s license for 10 years, had four drunk driving convictions, and was listed as an excluded driver on her policy.
DeYoung applied for PIP benefits from Progressive but was denied. The trial court that initially took up the case sided with the insurance company in denying a claim to coverage, saying that the family joyriding exception—which established that relatives who take family member’s car without permission should not be viewed as taking it unlawfully—did not apply in this case because he had been specifically barred on the policy. A court of appeals reversed the decision, and it ended up in the Supreme Court of Michigan. Ultimately, the state Supreme Court found that, similar to the trial court, the family joyriding exception didn’t apply. No insurance claims would be paid.
Spectrum Health v. Farm Bureau
Spectrum Health v. Farm Bureau involved three people: Craig Smith Sr., his son, Craig Smith Jr., and Junior’s girlfriend, Kathleen Chirco. Smith Sr. specifically gave Chirco permission to drive the car, and he specifically told Smith Jr. he could not drive the car. Smith Jr. did not have a valid license.
That night after drinking, Smith Jr. asked Chirco for the keys to drive the car and eventually she gave them to him. He subsequently crashed the car into a tree. In trial court the “chain of permissive use” was used and the court found that Chirco had been “empowered to grant others permission to operate the vehicle” and so coverage should be in place. But, after appeals and ending up at the Supreme Court, this claimant, like DeYoung, was found not to be able to collect on the policy. In the case of Spectrum Health, the court found that because the end user had been specifically barred from driving by the owner, and thus the car was unlawfully taken, no benefits would be paid in this case.
The Bottom Line
The Michigan Supreme Court held in both cases that both the men had taken the cars unlawfully. And they also decided that the use of the phrase “a person,” used in the penal code to define the unlawful taking of a vehicle, includes family members who have unlawfully taken a vehicle, thus keeping any benefits from being paid.
Many people think that if you take a family member’s car without their permission —but without the intent to steal it—they will be able to get benefits if something happens. But as these cases in Michigan shows, that’s not always so.
