Blog

DOES MICHIGAN NO-FAULT INSURANCE COVER NON-RESIDENT DRIVERS INVOLVED IN A CAR ACCIDENT?

Published by Bill Laubscher at April 9, 2024

close up of two cars involved in a head-on accident

If you are an out-of-state resident driving in Michigan, you may assume your auto insurance will cover you in the event of an accident. While this may be true in some cases, there are many instances where your policy will not provide the coverage you need if you or your passengers are injured. In fact, non-residents who drive on Michigan roadways more than 30 days per year are considered “uninsured motorists” unless their vehicle is covered by a Michigan No-Fault policy.

Here is an overview of Michigan’s complex insurance laws and why you need an experienced Michigan car accident attorney to receive the compensation you deserve.

Do You Have a Case?

WHAT ARE THE MICHIGAN INSURANCE LAWS FOR OUT-OF-STATE DRIVERS?

Typically, non-residents who have been driving in Michigan for fewer than 30 days in a calendar year are covered by the auto insurance policy issued in their home state. However, anyone spending more than 30 days per year in Michigan must insure their vehicle with a Michigan No-Fault policy.

Here are some examples of out-of-state drivers who may use their existing auto insurance in Michigan:

Someone driving through Michigan on the way to another state (unless they do so on more than 30 days during the year)
An individual or family spending a few weeks in Michigan for vacation or business purposes (unless they exceed the 30-day limit during a subsequent visit the same year)
A sales representative or businessperson who comes to Michigan for short visits or day trips, as long as the total number of days her is below 30
Any other out-of-state resident who drives on Michigan roads for fewer than 30 days a year, regardless of the purpose of their visit

WHO IS CONSIDERED A NON-RESIDENT UNDER MICHIGAN NO-FAULT LAW?

Here are most common categories of out-of-state drivers who typically need Michigan No-Fault coverage to avoid penalties and be eligible for Personal Injury Protection (PIP) benefits in the event of an accident:

College students whose primary residence is in another state or country
“Snowbirds” who spend part of the year in Michigan but have out-of-state car insurance
Workers who commute to Michigan from neighboring states or provinces such as Ohio, Indiana, Wisconsin or Ontario
Visitors, businesspeople or vacationers who spend more than 30 days per calendar year in Michigan

WHAT ARE THE PENALTIES FOR UNINSURED DRIVERS IN MICHIGAN?

Out-of-state residents who drive in Michigan more than 30 days in a calendar year, even if the days are non-consecutive, must have a Michigan No-Fault policy for their vehicle. Otherwise, they are considered uninsured drivers and are subject to the same penalties as Michigan residents who drive without insurance.

In Michigan, anyone who is convicted of driving an uninsured vehicle, allowing another person to drive their uninsured vehicle or driving someone else’s uninsured vehicle can be charged with a misdemeanor and subject to the following penalties:

Fines up to $500
Up to one year in jail
Possible driver’s license suspension
Both a fine (up to $500) and jail time (one year maximum)

In addition to the above penalties, uninsured motorists face other serious consequences in the event of a crash:

Uninsured drivers who cause an accident may be sued by the victim(s) and held personally liable for their medical expenses, property damage and more
Uninsured drivers are not able to sue the party who caused the accident for medical bills and other damages, even if an accident was not their fault
The option to recover damages under Michigan’s “mini tort” law is not available to uninsured drivers

WHO COVERS MY LOSSES IN A MICHIGAN ACCIDENT WITH AN OUT-OF-STATE DRIVER?

Assuming you (and/or the vehicle) are covered by a Michigan No-Fault policy, you are eligible for the benefits outlined in the policy, including medical expenses, lost wages, in-home attendant care and replacement services.

However, payment of medical bills is determined by the level of Personal Injury Protection (PIP) medical coverage specified in the policy. This applies whether the accident involved another Michigan driver or an out-of-state driver.

While Michigan No-Fault policies used to include unlimited lifetime coverage of “reasonable and necessary” medical care and related services, the laws changed to give policy holders a choice of six different levels of PIP medical benefits as of July 20, 2020:

Option 1: Unlimited lifetime PIP medical coverage (same as under the old law)

Option 2: Limited PIP medical coverage of $500,000

Option 3: Limited PIP medical coverage of $250,000

Option 4: Limited PIP medical coverage of $250,000 with Exclusions (for those with other qualified health care coverage)

Option 5: Limited PIP medical coverage of $50,000 (for Medicaid recipients only)

Option 6: No PIP medical coverage (for those covered under Medicare Parts A and B)

Therefore, medical benefits will be paid according to the terms of the No-Fault policy covering the injured party.

WHO IS LIABLE FOR A MICHIGAN ACCIDENT WHERE AN OUT-OF-STATE DRIVER IS INJURED?

Before the extensive No-Fault reforms of 2019, out-of-state drivers were eligible for Personal Injury Protection (PIP) medical benefits in Michigan if their auto insurance company was certified to write policies in Michigan.

However, since June 11, 2019, out-of-state residents injured in Michigan accidents are not eligible for Personal Injury Protection (PIP) benefits unless they own a vehicle that is both registered and insured in Michigan. Instead, they must seek reimbursement for medical expenses from their own auto insurance or health care plan.

CAN I BE SUED BY AN OUT-OF-STATE DRIVER WHO IS INJURED IN A MICHIGAN CRASH?

In some cases, yes. An unintended consequence of the No-Fault reforms is that Michigan drivers may face greater liability when an out of-state motorist is severely injured in a Michigan accident.

Because out-of-state residents can no longer receive Personal Injury Protection (PIP) benefits under Michigan No-Fault law, those with limited insurance may seek additional compensation from the at-fault driver.

Therefore, it is a good idea for all Michigan drivers to carry as much liability insurance as possible to avoid a devastating financial outcome.

In addition, choosing a No-Fault policy with unlimited Personal Injury Protection (PIP) medical coverage will ensure your own expenses if you are injured in an accident, in Michigan or elsewhere.

DOES MICHIGAN NO-FAULT INSURANCE COVER OUT-OF-STATE CAR ACCIDENTS?

Yes, in most circumstances. According to Michigan law (MCL 500.3111), victims are eligible for Personal Injury Protection (PIP) benefits for injuries incurred in an out-of-state accident under the following conditions:

The accident occurs within the United States, its territories and possessions, or Canada, and the victim is:

The named insured person under a Michigan No-Fault policy
The spouse of a named insured person
A relative living in the same household
An occupant of a vehicle involved in the accident as long as they reside in Michigan resident or the owner or registrant of the vehicle is covered under a Michigan No-Fault policy

This means an out-of-state resident who is injured while driving or riding in a vehicle insured by a Michigan No-Fault policy may be entitled to PIP benefits under the policy covering the vehicle.

However, the Property Protection Insurance (PPI) included in every Michigan No-Fault policy does not cover property damage resulting from an out-of-state accident.

Recommended reading: New Michigan Law Prohibits Hand-Held Cell Phones

CAN DRIVERS HAVE AUTO INSURANCE POLICIES FROM MORE THAN ONE STATE?

Yes. Motorists who plan to drive in Michigan for more than 30 days per calendar year can purchase Michigan No-Fault insurance in addition to the policy they already have in another state. In fact, drivers who spend time each year in multiple states may have several policies, depending on the laws in each state.

CALL OUR EXPERIENCED MICHIGAN CAR ACCIDENT LAWYERS TODAY

If you or a loved one is injured in a crash, we can help. Our experienced car accident lawyers have the skills, knowledge and resources to win the compensation you and your family deserve.

Auto accident law is complicated, but finding the right Michigan car accident attorney is simple.

Don’t let the legal clock run out. Start your case today by clicking on the link below or calling 1-800-CALL-SAM for a free, no-obligation consultation with a member of our legal team.

If you’ve been injured, Better Get Bernstein®!

Do You Have a Case?

HAVE YOU BEEN INJURED?

Get The Bernstein Advantage^® today!
Free. Simple. Quick.