Michigan's highest court has changed how insurers figure out who pays when a child of divorced parents is hurt in a crash.
In a decision issued July 22, 2026, the Michigan Supreme Court overruled its own 2013 ruling, known as Grange, resetting how courts decide where a child actually lives - the fact that determines which auto insurer covers injury benefits.
The dispute began with a crash on January 8, 2020. A 15-year-old passenger was riding to school in her father's car, driven by her brother, when it hit ice and struck a tree. She was badly hurt and needed emergency back surgery.
Her parents divorced in 2011. Their custody order split time evenly, 50/50, but in practice she spent about 75% of her time at her mother's home and 25% at her father's. The night before the crash, she had stayed at her father's.
That mattered. Under Michigan's no-fault system, the insurer that pays personal protection insurance benefits - PIP, which covers medical costs after a crash - is usually the one covering the household where the injured relative is "domiciled," their settled home.
Her father was insured by Esurance Property and Casualty Insurance Company (Esurance), her mother by Auto-Owners Insurance Company (Auto-Owners). Esurance argued the girl mainly lived with her mother, so Auto-Owners should pay. Auto-Owners leaned on Grange, which treated the custody order as the last word. Because she was at her father's on the day of the crash, the trial court and the Court of Appeals placed her with him - and Esurance on the hook.
The Supreme Court disagreed. A custody order, it held, is only a starting point. Courts must now weigh all the facts, including where the child spends most of their time and sleeps most nights.
The justices spoke directly to insurers. The old rule, they wrote, could move a child's domicile "week-by-week, or even day-by-day," and it "unduly impinges on the ability of an insurer to accurately assess its risks when entering into insurance agreements."
The court vacated the lower rulings and sent the case back to the trial court. Also remanded is the Esurance policy's "step-down" clause, which drops bodily injury liability coverage from $250,000 to $20,000 for a "resident" of the father's household - a question that hinged on the domicile finding now vacated.
