Michigan Compiled Laws

Mich. Comp. Laws § 257.520 (2026)

Motor vehicle liability policy; definition; contents; coverage; limits; conditions; excess or additional coverage; reimbursement; proration; binder or indorsement.

✓ current as of July 2026

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MICHIGAN VEHICLE CODE

Act 300 of 1949

257.520 Motor vehicle liability policy; definition; contents; coverage; limits; conditions; excess or additional coverage; reimbursement; proration; binder or indorsement.

Sec. 520.

(a) A "motor vehicle liability policy" as used in this chapter, shall mean an owner's or an operator's policy of liability insurance, certified as provided in section 518 or section 519 as proof of financial responsibility, and issued, except as otherwise provided in section 519, by an insurance carrier duly authorized to transact business in this state, to or for the benefit of the person named therein as insured.

(b) Such owner's policy of liability insurance:

(1) Shall designate by explicit description or by appropriate reference all motor vehicles with respect to which coverage is thereby to be granted; and

(2) Shall insure the person named therein and any other person, as insured, using any such motor vehicle or motor vehicles with the express or implied permission of such named insured, against loss from the liability imposed by law for damages arising out of the ownership, maintenance or use of such motor vehicle or motor vehicles within the United States of America or the Dominion of Canada, subject to limits exclusive of interest and costs, with respect to each such motor vehicle, as follows: $20,000.00 because of bodily injury to or death of 1 person in any 1 accident and, subject to said limit for 1 person, $40,000.00 because of bodily injury to or death of 2 or more persons in any 1 accident, and $10,000.00 because of injury to or destruction of property of others in any 1 accident;

(3) When a certificate is filed showing that a policy or policies have been issued covering all motor vehicles owned by the insured but not insuring such person when operating any motor vehicle not owned by him, it shall be unlawful for such person to operate any motor vehicle not owned by him or not covered by such certificate.

(c) Such operator's policy of liability insurance shall insure the person named as insured therein against loss from the liability imposed upon him by law for damages arising out of the use by him of any motor vehicle not owned by him, within the same territorial limits and subject to the same limits of liability as are set forth above with respect to an owner's policy of liability insurance.

(d) Such motor vehicle liability policy shall state the name and address of the named insured, the coverage afforded by the policy, the policy period, and the limits of liability, and shall contain an agreement or be indorsed that insurance is provided thereunder in accordance with the coverage defined in this chapter as respects bodily injury and death or property damage, or both, and is subject to all the provisions of this chapter.

(e) Such motor vehicle liability policy need not insure any liability under any workmen's compensation law nor any liability on account of bodily injury to or death of an employee of the insured while engaged in the employment, other than domestic, of the insured, or while engaged in the operation, maintenance or repair of any such motor vehicle nor any liability for damage to property owned by, rented to, in charge of, or transported by the insured.

(f) Every motor vehicle liability policy shall be subject to the following provisions which need not be contained therein:

(1) The liability of the insurance carrier with respect to the insurance required by this chapter shall become absolute whenever injury or damage covered by said motor vehicle liability policy occurs; said policy may not be cancelled or annulled as to such liability by any agreement between the insurance carrier and the insured after the occurrence of the injury or damage; no statement made by the insured or on his behalf and no violation of said policy shall defeat or void said policy, and except as hereinafter provided, no fraud, misrepresentation, assumption of liability or other act of the insured in obtaining or retaining such policy, or in adjusting a claim under such policy, and no failure of the insured to give any notice, forward any paper or otherwise cooperate with the insurance carrier, shall constitute a defense as against such judgment creditor.

(2) The satisfaction by the insured of a judgment for such injury or damage shall not be a condition precedent to the right or duty of the insurance carrier to make payment on account of such injury or damage.

(3) If any person shall secure final judgment against the insured for loss or damage covered by any such policy and if such judgment is not satisfied within 30 days after it shall have become final, then such judgment creditor shall be entitled to recover under the terms of such policy in the same manner and to the same extent as the insured, except as hereinafter provided.

(4) The insurance carrier shall have the right to settle any claim covered by the policy, and if such settlement is made in good faith, the amount thereof shall be deductible from the limits of liability specified in subparagraph (2) of paragraph (b) of this section.

(5) The policy, the written application therefor, if any, and any rider or indorsement which does not conflict with the provisions of this chapter, shall constitute the entire contract between the parties.

(6) The insurance carrier shall not be liable on any judgment if it has not had prompt notice of and reasonable opportunity to appear in and defend the action in which such judgment was rendered, or if the judgment has been obtained through collusion between the judgment creditor and the insured.

(g) Any policy which grants the coverage required for a motor vehicle liability policy may also grant any lawful coverage in excess of or in addition to the coverage specified for a motor vehicle liability policy and such excess or additional coverage shall not be subject to the provisions of this chapter. With respect to a policy which grants such excess or additional coverage the term "motor vehicle liability policy" shall apply only to that part of the coverage which is required by this section.

(h) Any motor vehicle liability policy may provide that the insured shall reimburse the insurance carrier for any payment the insurance carrier would not have been obligated to make under the terms of the policy except for the provisions of this chapter.

(i) Any motor vehicle liability policy may provide for the prorating of the insurance thereunder with other valid and collectible insurance.

(j) The requirements for a motor vehicle liability policy may be fulfilled by the policies of 1 or more insurance carriers which policies together meet such requirements.

(k) Any carrier authorized to issue motor vehicle liability policies may, pending the issuance of such a policy, execute an agreement, to be known as a "binder", or may, in lieu of such a policy, issue an indorsement to an existing policy. Every such binder or indorsement shall be subject to the provisions of this section and shall be construed to provide indemnity or insurance in like manner and to the same extent as a motor vehicle liability policy.

History: 1949, Act 300, Eff. Sept. 23, 1949 ;-- Am. 1955, Act 219, Eff. Oct. 14, 1955 ;-- Am. 1958, Act 155, Eff. Sept. 13, 1958 ;-- Am. 1966, Act 247, Eff. Mar. 10, 1967 ;-- Am. 1971, Act 138, Eff. Oct. 1, 1971

Notes of Decisions

Cited in 122 cases (6 in the last 5 years), 1953–2025 · leading case: Bazzi v. Sentinel Insurance Company

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Bazzi v. Sentinel Ins. Co., 891 N.W.2d 13 (Mich. Ct. App. 2016). · cites it 70× “In this respect, I would affirm the decision of the circuit court, save for the circuit court’s decision to limit PIP benefits to the statutory minimums set forth in MCL 257.520, which does not apply to the coverage at issue.”

Titan Ins. Co. v. Hyten, 491 Mich. 547 (Mich. 2012). · cites it 26× “520(f)(1) (“The liability of the insurance carrier with respect to the insurance required by this chapter shall become absolute whenever injury or damage covered by said motor vehicle liability policy occurs; .”

Collins v. Nat'l Gen. Ins., 834 F. Supp. 2d 632 (E.D. Mich. 2011). · cites it 15× “On January 11, 2011, the Wayne County Circuit Court granted Citizens’ motion, reforming the Citizens Policy to provide coverage of no more than the minimum required under Michigan law for Plaintiffs claims against Smith and Berrien, pursuant to Mich. Comp. Laws § 257.520 (f)(1).…”

Universal Underwriters Ins. v. Kneeland, 628 N.W.2d 491 (Mich. 2001). · cites it 8× “§ 257.520(b)(2); MSA 9.2220(b)(2) and M.C.”

State Farm Mut. Auto. Ins. v. Ruuska, 282 N.W.2d 472 (Mich. Ct. App. 1979). · cites it 14× “MCL 257.520; MSA 9.2220 sets out the scope of coverage required in a "motor vehicle liability policy".”

Cohen v. Auto Club Ins. Ass'n, 620 N.W.2d 840 (Mich. 2001). · cites it 8× “] That concluding phrase (“the coverage which is required by this section”) means a policy of Lability insurance as specified in the earlier subsections of MCL 257.520; MSA 9.2220. The effect of MCL 257.”

Ali Bazzi v. Sentinel Ins. Co., 919 N.W.2d 20 (Mich. 2018). · cites it 2× “520(f)(1) ("The liability of the insurance carrier with respect to the insurance required by this chapter shall become absolute whenever injury or damage covered by said motor vehicle liability policy occurs .”

Titan Ins. v. Hyten, 805 N.W.2d 503 (Mich. Ct. App. 2011). · cites it 10× “MCL 257.520(a) and (b)(2). Optional coverage means “any lawful coverage in excess of or in addition to the coverage specified for a motor vehicle liability policy.”

Citizens Ins. Co. of Am. v. Federated Mut. Ins., 500 N.W.2d 773 (Mich. Ct. App. 1993). · cites it 14× “2220(b)(2), which provides: Such owner's policy of liability insurance: * * * (2) Shall insure the person named therein and any other person, as insured, using any such motor vehicle or motor vehicles with the express or implied permission of such named insured, against loss…”

Se. Michigan Surgical Hosp., LLC v. Allstate Ins. Co., 892 N.W.2d 434 (Mich. Ct. App. 2016). · cites it 6× “Under MCL 257.520, an insurer is required to insure the owner of the policy and authorized persons driving the covered vehicle at a minimum dollar amount for liability arising from injury to other persons or property.”

Citizens Ins. Co. of Am. v. Federated Mut. Ins., 531 N.W.2d 138 (Mich. 1995). · cites it 5× “In Citizens and Wisswell, the circuit court and Court of Appeals held that the coverage provision of Federated’s insurance policy was invalid because it contravened the financial responsibility act, MCL 257.”

Bradley v. Mid-Century Ins., 294 N.W.2d 141 (Mich. 1980). · cites it 3× “66 MCL 257.520, subds (i) and (j); MSA 9.2220, subds (i) and (j).”

Show all 122 citing cases →

— Mich. Comp. Laws § 257.520(2) — 1 case

Mate v. Wolverine Mut. Ins., 592 N.W.2d 379 (Mich. Ct. App. 1999).

— Mich. Comp. Laws § 257.520(a) — 9 cases

Titan Ins. Co. v. Hyten, 491 Mich. 547 (Mich. 2012). “520(f)(1) (“The liability of the insurance carrier with respect to the insurance required by this chapter shall become absolute whenever injury or damage covered by said motor vehicle liability policy occurs; .”

Bazzi v. Sentinel Ins. Co., 891 N.W.2d 13 (Mich. Ct. App. 2016). “In this respect, I would affirm the decision of the circuit court, save for the circuit court’s decision to limit PIP benefits to the statutory minimums set forth in MCL 257.520, which does not apply to the coverage at issue.”

Farmers Ins. Exch. v. Farm Bureau Gen. Ins., 724 N.W.2d 485 (Mich. Ct. App. 2006).

Titan Ins. v. Hyten, 805 N.W.2d 503 (Mich. Ct. App. 2011). “MCL 257.520(a) and (b)(2). Optional coverage means “any lawful coverage in excess of or in addition to the coverage specified for a motor vehicle liability policy.”

Cohen v. Auto Club Ins. Ass'n, 606 N.W.2d 664 (Mich. Ct. App. 2000).

— Mich. Comp. Laws § 257.520(b) — 25 cases

State Farm Mut. Auto. Ins. v. Ruuska, 282 N.W.2d 472 (Mich. Ct. App. 1979). “MCL 257.520; MSA 9.2220 sets out the scope of coverage required in a "motor vehicle liability policy".”

State Farm Mut. Auto. Ins. v. Ruuska, 314 N.W.2d 184 (Mich. 1982).

Citizens Ins. Co. of Am. v. Federated Mut. Ins., 500 N.W.2d 773 (Mich. Ct. App. 1993). “2220(b)(2), which provides: Such owner's policy of liability insurance: * * * (2) Shall insure the person named therein and any other person, as insured, using any such motor vehicle or motor vehicles with the express or implied permission of such named insured, against loss…”

— Mich. Comp. Laws § 257.520(b)(1) — 3 cases

State Farm Mut. Auto. Ins. v. Ruuska, 282 N.W.2d 472 (Mich. Ct. App. 1979). “MCL 257.520; MSA 9.2220 sets out the scope of coverage required in a "motor vehicle liability policy".”

Farmers Ins. Exch. v. Farm Bureau Gen. Ins., 724 N.W.2d 485 (Mich. Ct. App. 2006).

Farmers Ins. Exch. v. FARM BUREAU GEN. INS. CO., 731 N.W.2d 757 (Mich. 2007).

— Mich. Comp. Laws § 257.520(b)(2) — 40 cases

Universal Underwriters Ins. v. Kneeland, 628 N.W.2d 491 (Mich. 2001). “§ 257.520(b)(2); MSA 9.2220(b)(2) and M.C.”

Farmers Ins. Exch. v. Kurzmann, 668 N.W.2d 199 (Mich. Ct. App. 2003).

Tahash v. Flint Dodge Co., 321 N.W.2d 698 (Mich. Ct. App. 1982).

— Mich. Comp. Laws § 257.520(c) — 3 cases

Garrison v. Farm Bureau Mut. Ins., 270 N.W.2d 678 (Mich. Ct. App. 1978).

Citizens Ins. Co. of Am. v. Federated Mut. Ins., 531 N.W.2d 138 (Mich. 1995). “In Citizens and Wisswell, the circuit court and Court of Appeals held that the coverage provision of Federated’s insurance policy was invalid because it contravened the financial responsibility act, MCL 257.”

Cora v. Patterson, 222 N.W.2d 221 (Mich. Ct. App. 1974).

— Mich. Comp. Laws § 257.520(e) — 5 cases

State Farm Mut. Auto. Ins. v. Roe, 573 N.W.2d 628 (Mich. Ct. App. 1998).

Weisberg v. Det. Auto. Inter-ins. Ex., 194 N.W.2d 193 (Mich. Ct. App. 1971).

Detroit Auto. Inter-Ins. Exch. v. Irvine, 284 N.W.2d 535 (Mich. Ct. App. 1979).

Weisberg v. Detroit Auto. Inter-Ins. Exch., 36 Mich. App. 513 (Mich. Ct. App. 1971).

State Farm Fire & Cas. Co. v. Old Repub. Ins., 617 N.W.2d 715 (Mich. Ct. App. 2000).

— Mich. Comp. Laws § 257.520(f) — 5 cases

State Farm Mut. Auto. Ins. Co. v. Michigan Mun. Risk Mgmt. Auth., 892 N.W.2d 451 (Mich. Ct. App. 2016).

Ali Bazzi v. Sentinel Ins. Co. (Mich. Ct. App. 2016).

Auto Club Ins. Assn v. Bristol West Preferred Ins. Co (Mich. Ct. App. 2016).

— Mich. Comp. Laws § 257.520(f)(1) — 21 cases

Ali Bazzi v. Sentinel Ins. Co., 919 N.W.2d 20 (Mich. 2018). “520(f)(1) ("The liability of the insurance carrier with respect to the insurance required by this chapter shall become absolute whenever injury or damage covered by said motor vehicle liability policy occurs .”

Collins v. Nat'l Gen. Ins., 834 F. Supp. 2d 632 (E.D. Mich. 2011). “On January 11, 2011, the Wayne County Circuit Court granted Citizens’ motion, reforming the Citizens Policy to provide coverage of no more than the minimum required under Michigan law for Plaintiffs claims against Smith and Berrien, pursuant to Mich. Comp. Laws § 257.520 (f)(1).…”

Cohen v. Auto Club Ins. Ass'n, 620 N.W.2d 840 (Mich. 2001). “] That concluding phrase (“the coverage which is required by this section”) means a policy of Lability insurance as specified in the earlier subsections of MCL 257.520; MSA 9.2220. The effect of MCL 257.”

— Mich. Comp. Laws § 257.520(f)(6) — 8 cases

Helder v. Sruba, 611 N.W.2d 309 (Mich. 2000).

Kleit v. Saad, 395 N.W.2d 8 (Mich. Ct. App. 1985).

Bristol West Ins. v. Whitt, 406 F. Supp. 2d 771 (W.D. Mich. 2005).

LeDuff v. Auto Club Ins., 536 N.W.2d 812 (Mich. Ct. App. 1995).

Helder v. North Pointe Ins., 595 N.W.2d 157 (Mich. Ct. App. 1999).

— Mich. Comp. Laws § 257.520(g) — 16 cases

Universal Underwriters Ins. v. Kneeland, 628 N.W.2d 491 (Mich. 2001). “§ 257.520(b)(2); MSA 9.2220(b)(2) and M.C.”

Lake States Ins. v. Wilson, 586 N.W.2d 113 (Mich. Ct. App. 1998).

— Mich. Comp. Laws § 257.520(i) — 1 case

— Mich. Comp. Laws § 257.520(j) — 8 cases

Integral Ins. v. Maersk Container Serv. Co., 520 N.W.2d 656 (Mich. Ct. App. 1994).

State Farm Mut. Auto. Ins. v. Auto-Owners Ins., 433 N.W.2d 323 (Mich. Ct. App. 1988).

Niles Johnson v. USA Underwriters (Mich. Ct. App. 2019).

Michael Vantol v. Home-Owners Ins. Co. (Mich. Ct. App. 2019).

— Mich. Comp. Laws § 257.520(k) — 2 cases

Lewis v. Farmers Ins. Grp., 397 N.W.2d 297 (Mich. Ct. App. 1986).

Lawrence Holman v. Yahya Mossa-Basha (Mich. Ct. App. 2018).

Annotations are extracted automatically from the opinions in the Syfert caselaw corpus and ranked by authority, recency, and treatment. Dots show Syfertize treatment of the citing case itself.