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Michigan Supreme Court shifts PIP coverage after child custody domicile ruling
The court overruled its 2013 Grange precedent, directing lower courts to weigh where the child actually spends most time and sleeps, rather than relying on a 50/50 custody order.
Michigan's highest court has changed how insurers determine which carrier pays personal protection insurance benefits when a child of divorced parents is hurt in a crash, issuing a decision on July 22, 2026. According to Insurance Business, the ruling overruled the Michigan Supreme Court's 2013 Grange decision, which treated the custody order as the controlling factor for establishing a child's domicile, the fact typically used to decide which auto insurer covers PIP injuries under Michigan's no-fault system.
The dispute began with a January 8, 2020 crash, when a 15-year-old passenger riding to school in her father's car was badly hurt and needed emergency back surgery. The parents divorced in 2011, and while their custody order split time evenly at 50/50, the child spent about 75% of her time at her mother's home and 25% at her father's, and she stayed at her father the night before the crash, Insurance Business reported.
The court said custody orders are only a starting point and that courts must consider all relevant facts, including where the child spends most time and sleeps most nights, noting the prior approach could shift domicile “week-by-week” and “unduly” affect insurers' ability to assess risks. It vacated the lower rulings and sent the case back for a new domicile finding, also remanding questions tied to an Esurance policy “step-down” clause that can reduce bodily injury liability coverage for a resident of the father's household from $250,000 to $20,000.