March 18, 2026
In Cater v Powell, et al., the Court of Appeals held that Plaintiff was excluded from uninsured motorist (“UM”) benefits under a Michigan automobile policy of insurance issued by Citizens United Reciprocal Exchange (“CURE”). At the time of the accident, Plaintiff was operating a vehicle owned by his girlfriend, Kawana French, with permission, but without a valid driver’s license. After the accident, Plaintiff claimed entitlement to UM benefits under the CURE policy issued to French as Plaintiff was driving her insured vehicle with permission.
The CURE policy provided that with regard to UM benefits, “[w]e will pay compensatory damages which an ‘insured’ is legally entitled to recover from the owner or operator of an ‘uninsured motor vehicle’ because of ‘bodily injury’…” The definition of “insured” under the policy included not only the named insured and her family members, but also any other person occupying a covered auto. However, the policy specifically excluded from coverage any bodily injury sustained by an insured while using the vehicle “without a reasonable belief that the insured is entitled to do so.”
CURE maintained that although Plaintiff may have been eligible for coverage as an “insured”, he was excluded from coverage because he was operating French’s vehicle without a valid driver’s license. CURE argued that without a license, Plaintiff could not have reasonably believed that he was lawfully operating the vehicle at the time of the accident, regardless of whether or not French had given him permission. In response, Plaintiff argued that he had a reasonable belief that he was entitled to use French’s vehicle because she consented to the use and his lack of a valid driver’s license was irrelevant. The trial court granted CURE’s motion for summary disposition and Plaintiff appealed.
The issue before the Court of Appeals was whether Plaintiff could recover UM benefits under the terms of the policy if Plaintiff was operating the vehicle with consent but without a valid driver’s license. The Court of Appeals recognized that Plaintiff’s claim for UM benefits differed from a claim for PIP benefits, but believed the analysis of each claim to be similar. Focusing on MCL 500.3113, the Court noted a clear distinction between using and taking. The Court found there must be an actual connection between the unlawful act and the attainment of possession. And, “a mere use of the vehicle that is unlawful but that is unconnected to attaining possession does not satisfy the definition of ‘taken unlawfully’ for purposes of MCL 500.3113(a) . . . .” VHS of Mich, Inc v State Farm Mut Auto Ins Co, ___ Mich App ___ (2024).
The Court then analyzed the specific policy language at issue controlling Plaintiff’s UM claim. The insurance policy at-issue stated that UM coverage would not be provided for an insured “[u]sing a vehicle without a reasonable belief that that ‘insured’ is entitled to do so.” The Court focused on the word “entitled” which was not defined by the policy but has a plain meaning, according to Black’s Law Dictionary, of “[t]o grant a legal right to or qualify for.” Black’s Law Dictionary (12th ed). Assuming Plaintiff had permission to use French’s vehicle, the fact that he did not have a valid driver’s license meant that Plaintiff did not have a legal right to operate a vehicle on a highway in the State of Michigan pursuant to the Motor Vehicle Code. The Court found that, without a valid license, Plaintiff would be unable to demonstrate any scenario under which he could have in good-faith reasonably believed that he was entitled to operate French’s vehicle. Therefore, the exclusion contained in the CURE policy applied to bar Plaintiff’s claim for UM benefits and the Circuit Court had properly granted CURE’s motion for summary disposition.