Questions & answers · Car insurance
In Michigan, does the prompt-payment law apply to the other driver's insurer when I make a claim against its customer?
Car insurancePaid too littleMichiganChecked Nov 6, 2026
From K.Actuary, founded by Sangmin Kwon, ASA · sources checked 2026-11-06 · Source: Michigan Legislature · Michigan Compiled Laws, Insurance Code · MCL 500.2006(1), (3), (4) View original ↗
In short
- Michigan's pay-on-time rule names a "third party tort claimant."
- Send your claim in writing and keep the date.
- The insurer has 30 days to list the proof it needs.
What this means
Michigan law says an insurer must pay on a timely basis. That includes a "third party tort claimant" [1]. Late payment is an unfair trade practice unless the claim is reasonably in dispute [1].
The insurer must say in writing what proof it needs. It has 30 days after it gets your claim [1]. It does not have to do this if it settles the claim within 30 days [1].
A third party can get 12 percent yearly interest only in a narrow case. The insurer's liability must not be reasonably in dispute. The insurer must have refused to pay in bad faith, and a court must have decided that [1]. The law does not say how many days "timely" means for a third party.
Your next step
Send the insurer your claim in writing and keep the date. If 30 days pass without a written list of what proof it needs, ask for that list in writing. The statute gives no day count for final payment to a third party.
Check it yourself
Open MCL 500.2006 and read subsections (1), (3) and (4).
Where this comes from (1)
[1] Michigan Legislature · Michigan Compiled Laws, Insurance Code · MCL 500.2006(1), (3), (4) · checked 2026-11-06
(1) A person must pay on a timely basis to its insured, a person directly entitled to benefits under its insured's insurance contract, or a third party tort claimant the benefits provided under the terms of its policy, or, in the alternative, the person must pay to its insured, a person directly entitled to benefits under its insured's insurance contract, or a third party tort claimant 12% interest, as provided in su…
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