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More bad insurance law for new Michigan residents

Most people don’t think about insuring and registering their automobiles immediately after moving to a new state. But thanks to another unfair Michigan insurance law, that’s what has to be done to be protected in case of an auto accident. In Jones v. SBC Teleholdings Inc., the Michigan Court of Appeals recently ruled that Michigan residents are not entitled to a 30-day grace period before insuring or registering their vehicles in this state. The holding creates one more avenue insurance companies can use to void coverage to unassuming victims who have been injured or killed in car and truck accidents in Michigan.

No grace period to procure Michigan no fault insurance

In Jones, plaintiff Jennifer Jones was driving a car registered in her name but insured in Georgia, where the vehicle was garaged. The car was transported to Michigan and was here for only a few days when Jones was injured in a rear-ending car accident. She had been living and working in Michigan since 2003, had a Michigan driver’s license and had enrolled her children in Michigan schools.

MCL 500.3102(1) states: A nonresident owner or registrant of a motor vehicle or motorcycle not registered in this state shall not operate or permit the motor vehicle or motorcycle to be operated in this state for an aggregate of more than 30 days in any calendar year unless he or she continuously maintains security (i.e. a Michigan no fault insurance policy) for the payment of benefits pursuant to this chapter.

Jones argued that the 30-day waiting period for Michigan insurance applied to all motor vehicles registered outside of Michigan. However, the Court of Appeals disagreed, ruling Jones was a Michigan resident and was not entitled to the 30-day grace period to insure her vehicle with a Michigan no fault policy, as set forth in the no fault act.

The Court stated: While such a grace period may, indeed, make sense under the facts of this case, we do not read the statute as so providing. ‘Nonresident’ clearly modifies both ‘owner’ and ‘registrant.’ Thus, because 3102(1) is limited to nonresident owners and registrants of vehicles, and plaintiff was a resident, the statute is inapplicable.

Therefore, Jones’ out-of-state insurer did not have to convert to a Michigan policy and was not required to pay no fault benefits for her accident.

No grace period for Michigan residents to register vehicles in Michigan

Jones is significant for new Michigan residents for another reason. Once a person moves to Michigan with the intent of being a resident, that person does not have a grace period to register his vehicle in this state. Pursuant to MCL 500.216, every motor vehicle that’s operated on Michigan highways must be registered, with the exception of non-residents.

Furthermore, MCL 500.215 states: It is a misdemeanor for any person to drive or move or for an owner knowingly to permit to be driven or moved upon a highway any vehicle of a type required to be registered hereunder which is not registered…

It’s important to note that even if a person does not intend to be a resident, he can be considered a resident based on his conduct over a period of time. Jones was considered a Michigan resident by the Court, because she lived and worked in Michigan since 2003, and was therefore required to register her vehicle in Michigan the moment it crossed the state line.

Harsh consequences for Michigan residents with cars in other states

If a Michigan resident is the owner and operator of a car insured in another state, the consequences can also be severe. Like Jones, a Michigan resident who owns and operates a vehicle with out-of-state insurance could be left with no avenue of recovery if injured in an auto accident. For example, say a Michigan resident has a second home in Florida and keeps a properly registered and insured car there. If that person ever decides to drive his Florida car to Michigan, as soon as he crosses the Michigan state line, he is required not only to have the car registered in Michigan, but to have Michigan no fault insurance. What’s more, if that person is involved in an auto accident, he cannot sue for non-economic damages, pursuant to MCL 500.3135(2)(c) and he cannot receive Michigan no fault benefits, pursuant to MCL 500.3113(b).

So the point bears repeating: If you are a new Michigan resident, it is imperative that you get your vehicle registered and insured in Michigan immediately. If you are an established Michigan resident, but have a second home in another state and a vehicle that’s registered and insured in that state, it is imperative that you also register the vehicle in Michigan and add Michigan no fault insurance coverage, before you drive the vehicle into the state.

If you have been in an auto accident and you are neither registered nor insured in Michigan, or if you are having problems receiving payment from your insurance company, the car and truck accident attorneys at Michigan Auto Law can address your concerns.

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Blog Author Steven M. Gursten
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