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What NOT to Do When Renting a Car

Motor Vehicle Litigation / September 7, 2023

In Ahmed v Tokio Marine Am Ins Co, 337 Mich App 1, 10 (2021), the Court of Appeals established a three-prong test to evaluate claims under MCL 500.3113(a) and determined that “the disqualification applies to any person (1) ‘willingly operating or willingly using a motor vehicle’ that (2) was unlawfully taken by someone, and (3) the person seeking benefits ‘knew or should have known’ that the motor vehicle was taken unlawfully.” Therefore, in determining whether a taking is “unlawful,” a breach of a vehicle rental agreement between two parties is conclusive proof of a party’s unauthorized, and therefore unlawful, use of a motor vehicle. If a rental agreement requires authorization, either expressed or implied, it must be given by the vehicle owner (rental company) not the renter. As such, the language of the rental agreement is binding in determining who is authorized to use the rented vehicle.


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