Are excluded drivers covered if they're not at fault for the accident?
I wasn't at-fault for the accident but am an excluded driver on my parent's policy.
If the excluded driver was driving but another party hits them, the at-fault party is still responsible for paying for the damages. Had the accident been caused by an excluded driver, the insurance company is under no obligation to honor that claim. One side note — if the excluded driver legally couldn't drive but did anyway, the state could issue a citation for being uninsured.
Michigan is a no-fault state. If either you or the driver became injured because of the accident, you would each turn to your own auto insurance to cover those medical expenses, no matter who was at fault.
If you have any other questions, don't hesitate to ask.