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Are you an out-of-state student attending college in Michigan? Beware of this dangerous car insurance trap!

August 13, 2012 by Steven M. Gursten

Carry No-Fault insurance on your car or face severe consequences if you’re involved in a  car accident

Live out-of-state but attending college in Michigan?   Here’s a rather nasty insurance trap that a lot of innocent out-of-state college students fall into every year.

The consequences can be devastating for them.

I’ve been practicing law in Michigan for nearly 20 years, specializing in helping people in car accidents.  And I’ve helped out-of-state students going to school in this state who’ve been injured in car crashes.  Here’s the trap I’ve seen the people I’ve been helping fall into:

If you’re an out-of-state resident – and if you live out of state and go to school in Michigan then you are 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 are required to both register your car in Michigan and to carry Michigan No-Fault (PIP) insurance.

Of course, no one knows about this. Your agent back home wouldn’t know this.  Your school is probably not telling you about this. But the  consequences of not doing this for you 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, this is the  double whammy:

  1. You will be  disqualified from receiving any Michigan No-Fault PIP benefits. These benefits include medical expense and mileage reimbursement, lost wages, replacement services (chores/help with children) and attendant care (in-home nursing services).
  2. 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!

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, but you can’t even sue the drunk who rear-ended you.

The law needs to be fixed.  And the consequences for out-of-state residents not being insured here in Michigan are shocking. Sadly, I’ve now seen theses consequences first-hand, and 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 for that student and her family.

Parents can become financially responsible for tens of thousands of dollars in medical bills.  An innocent person seriously injured by another’s negligence will recover nothing.

Steps to  protect yourself

First, add a Michigan No-Fault insurance policy now 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 President of the Motor Vehicle Trial Lawyers Association and head of Michigan Auto Law, Michigan’s largest law firm specializing in serious automobile accidents. Steve wrote the free book, Guide to Michigan No-Fault Law.

Michigan Auto Law is the largest law firm exclusively handling car accident, truck accident and motorcycle accident cases throughout the entire state. We have offices in Farmington Hills, Detroit, Ann Arbor, Grand Rapids and Sterling Heights. Call (800) 777-0028 to speak with one of our lawyers.

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