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Does my insurance cover a car accident out of state of Michigan?

August 29, 2019 by Steven M. Gursten

Car Accident Out of State: Does My Insurance Cover It?

If you’re a Michigan resident and going to be taking a road trip outside of Michigan, you need to check whether your car insurance will protect you if you’re involved in a car accident out of state.

For Michigan residents, this has special meaning. All car insurance will pay for bodily injury if you cause a car accident that injures someone. But Michigan also has auto No-Fault insurance, whereas most states do not.

Who pays for your medical bills and wage loss if you are hurt in an accident out of state? What will your own car insurance cover?

The answer will depend on who owns a vehicle that is insured and registered in this state. Below are the things you need to know when assessing your level of auto insurance protection should a car crash occur while you are visiting, say, Cedar Point in Sandusky, Ohio, or Disney World in Orlando, Florida.

Below I will discuss the many ways that a Michigan driver’s insurance can come into play with a car accident out of state.

No-Fault benefits after a car accident out of state

If you’re involved in a car accident anywhere in the U.S., its territories, possessions or Canada, then you will be entitled to collect No-Fault benefits to cover your accident-related medical expenses as well as lost wages. (MCL 500.3111)

Additional qualifying facts include whether:

  • You’re the named insured on a Michigan No-Fault auto insurance policy or you’re the spouse or resident relative of someone who is.
  • You were an occupant of a vehicle involved in the accident and either you’re a Michigan resident or the vehicle’s owner or registrant has No-Fault coverage for the vehicle.

Can I sue for pain and suffering if I’m involved in an out of state car accident?

Yes. If you’re injured in a car accident out of state, you will be able to sue the at-fault driver for pain and suffering compensation.

However, in order to bring and pursue such a lawsuit, you will have to comply with the laws of the state in which the out of state car accident occurred.

Can your Michigan auto insurance company put a lien on your settlement from a car accident out of state?

Yes. Michigan law allows a Michigan driver’s No-Fault auto insurance company to put a lien on a third-party tort claim recovery for pain and suffering compensation that the driver obtains in connection with a car accident out of state.

However, the insurer may pursue this type of lien only for the purpose of seeking reimbursement for the money it spent on the person’s No-Fault benefits. (MCL 500.3116(2))

To learn more, please check out our blog post about an auto insurer’s right of reimbursement for No-Fault benefits paid in connection with an out of state car accident.

Getting your vehicle damage repaired after an out of state accident

If your car or truck was damaged in a car accident out of state that was caused by a driver from that state (especially if the accident occurred in a pure tort state), then you will likely be going to court to get your damage repair costs covered.

Unlike Michigan, most other states (especially states with tort liability-based systems) require the at-fault driver, which is also frequently referred to as the “tortfeasor,” to pay to repair collision damage.

Alternatively, if the at-fault driver was uninsured or does not have the resources to pay for the damages to your vehicle, then you may have to file a claim on your personal auto collision coverage policy. That, of course, will depend on the terms of your coverage.

Covering your liability after an out of state car accident

Your residual liability insurance, which is required of every Michigan driver under the No-Fault law, will help cover your liability for “bodily injury and property damage” that you may owe if you were at-fault in causing a car accident out of state so long as the accident occurred in the U.S., its territories or possessions or Canada. (MCL 500.3101(1); 500.3131(1))

Specifically, it may help you to pay damages that the victim or victims of the accident are seeking for any or all of the following:

  • Medical bills
  • Pain and suffering
  • Lost wages
  • Vehicle damage repair costs
  • Damage to tangible property

However, whether your residual liability insurance will cover all of your liability will depend on two factors:

  • The extent of the damages that you owe
  • The mandatory minimum limits for liability insurance coverage in the place where the accident occurred

That’s because residual liability insurance provides “coverage equivalent to” the “automobile liability insurance” required “under the financial responsibility laws of the place in which the injury or damage occurs.” (MCL 500.3101(1); 500.3131(1))

Property protection insurance does not apply to damage from a car accident out of state

Your property protection insurance, which every Michigan driver is required to have, will not cover “property damage” resulting from a car accident “occurring outside the state.” (MCL 500.3101(1); 500.3123(2))

For accidents occurring in Michigan, PPI benefits will normally “accidental damage to tangible property arising out of the ownership, operation, maintenance, or use of a motor vehicle as a motor vehicle” up to $1 million. (MCL 500.3121(1) and (5))

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