A New Michigan Ruling Could Change How No-Fault Insurance Coverage Is Determined for Children of Divorced Parents
By Kevin Komar, Personal Injury Attorney, Sinas Dramis Law Firm
Divorce or separation is a reality for millions of Americans, bringing a host of challenges for parents to navigate. From parenting-time schedules and school decisions to healthcare coverage and financial responsibilities, many balance complex responsibilities across households long after the legal process ends.
What many parents may not realize is that automobile insurance can also become a significant issue, particularly when a child is injured in a motor vehicle crash.
Under Michigan’s No-Fault insurance system, an injured child’s medical expenses and other Personal Injury Protection (PIP) benefits are typically paid by the auto insurance policy of a family member with whom the child lives. While that sounds straightforward, determining which parent’s insurance company is responsible for paying benefits has been the subject of disputes between insurers and families for decades.
On July 22, 2026, the Michigan Supreme Court issued a significant decision that will likely have far-reaching implications for divorced and separated families across the state. The Court clarified that a child custody order, standing alone, does not determine a child’s domicile (primary residence) for purposes of No-Fault insurance coverage.
Looking Beyond the Custody Order
For years, courts and insurance companies often treated custody arrangements as highly influential when determining which parent’s insurance policy had priority. However, anyone who has worked with families knows that life rarely fits neatly within a custody judgment.
In many cases, as children grow older, they often spend more time with one parent than the custody order originally anticipated. Teenagers, in particular, tend to “vote with their feet,” choosing where they feel most comfortable living, regardless of what a court order may say.
The Michigan Supreme Court recognized this reality. Rather than relying primarily on custody orders, courts must now conduct a fact-intensive analysis of the child’s actual living arrangements when determining domicile for no-fault purposes.
That analysis may include questions such as:
- Where does the child sleep most nights?
- Where does the child spend the majority of their time?
- Where are the child’s personal belongings kept?
- Is a bedroom maintained for the child at a parent’s home?
- What address does the child use for mail?
- What address appears on the child’s driver’s license or state identification card?
- To which household is the child primarily connected and dependent?
As a result, custody orders are now merely a starting point rather than the determining factor.
A New Source of Litigation for Families
This decision may also create new challenges for families already dealing with the emotional and financial consequences of divorce.
When a child is seriously injured in a motor vehicle crash, parents are often focused solely on ensuring their child receives the medical treatment and support needed for recovery. The last thing most families expect is to become involved in a legal battle over where that child was actually living at the time of the accident.
Yet that is precisely what may occur.
Insurance companies faced with a significant no-fault claim may now engage in extensive discovery to determine residency. Parents could be asked to provide testimony, produce records, and revisit highly personal aspects of their family lives. Questions that many believed had been settled years earlier through a custody proceeding may suddenly become the focus of litigation once again.
At a time when families are already coping with a traumatic injury, disputes over domicile can add another layer of stress and uncertainty.
Practical Advice for Divorced and Separated Parents
While no family can eliminate the possibility of an insurance dispute, there are steps parents can take to reduce the risk of coverage issues.
One of the most important is ensuring that teenage and young-adult drivers are listed on all applicable household automobile insurance policies whenever appropriate. Depending on the family’s circumstances, parents should consider adding the child as a named driver, or even a named insured, regardless of how frequently the child resides in that household.
Doing so may help avoid confusion and reduce the likelihood of finger-pointing between insurance companies after a serious crash. More importantly, it can help ensure that coverage questions do not delay access to critical benefits when an injured child needs them most.
The Bottom Line
The Michigan Supreme Court’s ruling reflects the reality that family dynamics often evolve beyond what is written in a custody order. For No-Fault insurance purposes, courts must now focus on where a child actually lives rather than relying solely on legal custody arrangements.
This serves as an important reminder for divorced and separated parents to periodically review their insurance coverage and ensure it accurately reflects their family’s living arrangements.
When tragedy strikes, families should be focused on recovery, not fighting over which insurance company is responsible for paying benefits. Careful planning today can help avoid unnecessary disputes tomorrow.