Michigan Court of Appeals; Docket No. 192164; Unpublished
Judges Sawyer, Neff, and Garbrecht; Unanimous; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion 
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Motor Vehicle Code (Financial Responsibility Act) (MCL 257.501, et seq.)
Private Contract (Meaning and Intent)
CASE SUMMARY:
In this per curiam unpublished Opinion, the Court of Appeals held that an owner of a motor vehicle may not contractually shift the responsibility to provide insurance coverage to the driver of the vehicle who is a permissive user of the vehicle.
The defendant auto dealer provided plaintiff with the use of a courtesy car while plaintiffs car was being repaired. As part of the arrangement, plaintiff signed a contract providing that defendant, the owner of the courtesy car, was not providing insurance coverage, that plaintiff agreed to pay for all loss and damage to the car and hold defendant harmless from any liability resulting from plaintiffs use of the vehicle. Plaintiff was involved in an accident with a third party who sustained personal injuries in the collision. Defendant auto dealer's insurer claimed it was not obligated to provide coverage because of the contract signed by plaintiff with defendant.
The Court of Appeals found defendant's insurer obligated to provide coverage for the accident, despite the contract language to the contrary. The no-fault act requires the owner or registrant of a motor vehicle to provide coverage for residual liability arising from the use of the vehicle. Furthermore, the financial responsibility provisions of the Michigan Motor Vehicle Code, MCLA 257.520(b)(2), require that an owner's liability insurance policy extend not only to the person named in the policy, but to any permissive user of the covered vehicle. In reliance upon the Michigan Supreme Court's case in State Farm v Enterprise Leasing, 452 Mich 25; 549 NW2d 345 (1996) (Item No. 1852), the Court of Appeals held that the courtesy car agreement violates the intent of the no-fault act, and that the defendant's insurer was required to provide primary insurance coverage for liability arising out of the use of the vehicle.
