Failing to carry no-fault insurance on your car can have shockingly severe consequences if you’re in a car accident
If you’re an out-of-state resident (and if you live out of state and go to school in Michigan, you’re an out-of-state resident) and if your car is in Michigan for more than 30 days in any one year, then under Michigan law, you’re required to register your car in Michigan and to carry Michigan no-fault insurance.
Of course, no one knows about this. Your insurance agent back home wouldn’t know this. Your school is probably not telling you about this. But the consequences of not doing this can be drastic.
If the car you drive is in Michigan for more than 30 cumulative days and you are hurt in a car accident here in Michigan, you will face a double whammy:
- You will be disqualified from receiving any Michigan no-fault benefits. These benefits include medical expense and mileage reimbursement, lost wages, replacement services (chores/help with children) and attendant care (in-home nursing services).
- If you are the owner of the vehicle, then you are considered to be driving uninsured. This means you cannot bring a lawsuit for any personal injury or pain and suffering against the driver who causes your car accident – no matter how serious or catastrophic your injuries are.
For instance, you can be completely innocent, you can be rear-ended by a drunk driver, and you can be paralyzed for the rest of your life. But not only will you be uninsured for purposes of getting your medical bills paid through no-fault auto insurance, you can’t even sue the drunk who rear-ended you.
The consequences for out-of-state residents not being insured here in Michigan are shocking. Sadly, I’ve now seen theses consequences first-hand. The courts will enforce this law, even though no one knows about it and no one intends to break it.
Can I have my car registered and insured in more than one state?
The answer is yes; you can have your car simultaneously registered and insured in more the one state.
Parents of out-of-state students attending college in Michigan often let their children keep their cars at school. But if the student’s car is only insured in the home state and the student is seriously injured while driving that car here in Michigan during the school year, it quickly becomes an insurance nightmare.
Parents can become financially responsible for tens of thousands of dollars in medical bills. An innocent person seriously injured by another person’s negligence will recover nothing.
Steps to protect yourself from this auto insurance trap
Add a Michigan no-fault insurance policy now: Add a Michigan no-fault policy to whatever insurance company that writes your auto insurance policy in your home state. This way your car can be insured with only one auto insurer. In many cases, there isn’t even a new policy that needs to be written, just a rider or addendum.
Progressive Insurance warning: Some companies, like Progressive Insurance Company, are separately incorporated in Michigan and write policies in Michigan only under this separate company. This was done to avoid paying No-Fault benefits for out-of-state residents injured in Michigan on cars that have not been here for a cumulative total of more than 30 days. If you have Progressive, then you will need to have separate Progressive policies for both Michigan and the home state.
Savings tip: A great savings tip is to shop through an independent insurance agent who represents many insurance companies. This is often the easiest and most cost-effective way to protect yourself.
- Steve Gursten is an attorney who helps Michigan drivers understand their insurance rights. He wrote the free Guide to Michigan No-Fault Law and is available for comment.