Summary — HB 5950 (Public Act 224 of 2024)
Title: Insurance: automobile; coverage; allow insurers to exclude peer‑to‑peer car sharing. Amends MCL 500.1202, 500.3009, 500.3037, 500.3101, 500.3113; adds sections 130 and 3018 to the Insurance Code (1956 PA 218).
Status & timeline
- Introduced: Sept. 26, 2024 (Rep. Brenda Carter et al.).
- Passed House: Nov. 14, 2024; passed Senate: Dec. 19, 2024.
- Presented to Governor Jan. 8, 2025; approved Jan. 17, 2025.
- Filed with Secretary of State Jan. 17, 2025.
- Effective date: October 17, 2025.
- Enacted as: Public Act 224 of 2024.
Purpose / intent
HB 5950 implements insurance‑related provisions for peer‑to‑peer (P2P) car‑sharing arrangements. It creates a legal framework for how automobile insurance applies during a “car sharing period,” clarifies the insurable status of P2P platforms, and adjusts licensing and insurer‑exclusion rules to address coverage responsibilities and gaps.
Key provisions — what the law does
- New insurable interest and named‑insured authority (added Sec. 130):
- Recognizes that a peer‑to‑peer car sharing program has an insurable interest in a shared vehicle during the car‑sharing period.
- Permits a P2P program to own/maintain automobile insurance as the named insured covering: liabilities it assumes under program agreements, liabilities of the vehicle owner, damage to the shared vehicle, and liabilities of the driver.
- Prohibits P2P programs, unless otherwise authorized, from offering/selling insurance beyond incidental travel/auto insurance tied to a car‑sharing agreement.
- Prohibits conditioning a car‑sharing agreement on the driver purchasing residual third‑party liability through the P2P program.
Producer license exemption (amendment to Sec. 1202):
- Expands the existing insurance‑producer license exemptions to explicitly cover persons whose only sale of insurance is travel or auto‑related insurance sold in connection with sharing a vehicle under a car‑sharing program agreement.
Insurance coverage rules and insurer exclusions (amendments to Ch. 30 & related sections):
- Prescribes that shared‑vehicle owners and drivers must be insured during each car‑sharing period by an automobile insurance policy that either acknowledges P2P use or does not exclude it (including residual third‑party liability, personal protection, and property protection as required by Michigan law).
- If owner/driver coverage lapses or fails to provide required coverage, the P2P program’s insurance must provide primary coverage from the first dollar (cannot be conditioned on another insurer denying the claim first).
- Allows an automobile insurer to exclude coverage for a shared vehicle under an automobile insurance policy if the loss or injury occurred during a car‑sharing period, consistent with the new statutory structure (the bill clarifies how exclusions interact with required P2P program coverages).
Claims/primary liability triggers:
- The insurer or the P2P program providing required coverage is the primary insurer when there is a dispute about who controlled the vehicle at the time of loss and the P2P program does not provide required records, or where a dispute exists about whether the vehicle was returned to an agreed location.
Who is affected
- Peer‑to‑peer car‑sharing platforms (may insure vehicles and assume specified liabilities; limited in selling insurance products).
- Shared vehicle owners (owners must have or be covered by automobile policies recognizing P2P use; program liability may substitute in specified circumstances).
- Shared vehicle drivers (subject to required coverage and program terms).
- Automobile insurers (may write policies for P2P programs, may exclude coverage for losses during car‑sharing periods consistent with statute; subject to new primary‑coverage rules).
- Courts/municipal enforcement (minor, indeterminate fiscal impact anticipated where transfer of citation responsibility to the actual driver requires extra administrative steps).
Relationship to other legislation
- HB 5950 functionally accompanies HB 5949 (Peer‑to‑Peer Car Sharing Program Act) and HB 5951, which together establish statutory definitions, program requirements, liability allocations, and operational rules for P2P car sharing in Michigan.
Practical effect
- Establishes an insurance framework intended to close coverage gaps in P2P car sharing by making program‑level primary coverage available while allowing private insurers to structure policies that exclude car‑sharing periods where appropriate. It also lowers licensing barriers for incidental insurance sold with car‑sharing agreements and clarifies responsibilities in disputes over control and return of shared vehicles.
