Farmers Insurance Exchange doesn't have to pay two medical providers for treating a crash victim who effectively owned the uninsured car he was driving.
In a decision dated August 5, 2026, Michigan's Court of Appeals affirmed a ruling in favor of Farmers, ending a claim by Labser PLC and Northland Radiology over a man hurt in a May 2023 collision.
The man was driving a car his live-in girlfriend had bought less than two weeks earlier. It carried no insurance. He, his girlfriend, and their infant son were inside when it crashed.
With no coverage on the car, the providers turned to the Michigan Assigned Claims Plan, a state program that hands uninsured claims to a carrier. Farmers drew the claim and denied it.
Farmers argued the injured man was a "constructive owner" of the uninsured car, which under Michigan's no-fault law makes a person ineligible for personal protection insurance (PIP) benefits. The law defines an owner to include anyone "having the use of a motor vehicle, under a lease or otherwise, for a period that is greater than 30 days."
The record backed Farmers. The man was the primary driver, kept the keys, put gas in the car, chipped in for maintenance, and didn't need permission to drive it. After the crash, he arranged the towing, sale, and scrapping. On his own benefits application, he listed himself as an owner.
The providers said none of that mattered. They pointed to their own direct right to sue an insurer under the no-fault act - a right that lets them pursue payment without having to "stand in the shoes of an injured person."
The court agreed that right exists but said it went nowhere here. The direct-action law only reaches treatment "for an accidental bodily injury covered by personal protection insurance." Because the injured man was an uninsured owner, his injuries were never covered, so the providers had nothing to collect.
The providers also leaned on a recent rescission case. The court set it aside, noting rescission only applies when there is an actual policy to undo. Here, there was none.
The court affirmed summary disposition for Farmers, holding the providers had no path to PIP benefits for treating injuries the no-fault act had already disqualified from coverage.
