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Are Out-of-State Residents Covered Under Michigan’s New Auto Insurance Law?


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On July 2, 2020, Michigan’s new auto insurance law will go into effect, resulting in a number of significant changes for motorists in the state. But what if you’re visiting Michigan as an out-of-state resident and you are involved in a car accident? Are you covered?

The short answer is no. Under the new law, out-of-state residents are not covered in the event of a crash unless they own a vehicle that is registered and insured in the state of Michigan. Additionally, out-of-state residents are covered if they were in a vehicle that was insured in Michigan and are injured in an out-of-state crash. This is much different than the old law, which allowed out-of-state residents to be covered by the auto insurance policy on the vehicle they were occupying at the time of the accident.

So, what does the new law mean for out-of-state residents? Put simply, if you are an out-of-state driver who does not have a no-fault auto insurance policy in Michigan, you cannot collect compensation if you are injured in a crash.

Do I Need to Have Michigan Auto Insurance to Drive in the State?

Whether or not you need to purchase Michigan auto insurance depends on how long you will be driving in the state. If you are not a Michigan resident and you are simply passing through or spending a week-long vacation here each year, you do not need to purchase Michigan auto insurance. Anyone who drives in the state of Michigan for 30 days or less can rely on out-of-state car insurance coverage. Note that this does not mean 30 days at a time but, rather, 30 days over the course of a year.

If you drive for more than 30 days in Michigan, whether that’s 30 consecutive days or 30 cumulative days, you will need to obtain a separate Michigan no-fault auto insurance policy. If you don’t have a state auto insurance policy, you could face certain penalties.

Additionally, if you are an out-of-state driver who plans on having your car in Michigan for more than 90 days, you will need to register your vehicle with the state.

What Happens If I Don’t Have Michigan Auto Insurance?

If you operate your vehicle in Michigan for more than 30 days and you do not obtain a separate no-fault auto insurance policy, you will essentially be treated as an uninsured driver. This puts you at risk for facing certain serious penalties.

The penalties for being an uninsured driver in the state of Michigan include:

  • Up to one year in jail

  • Fines ranging from $200 - $500

You will also be denied any and all no-fault benefits for any medical expenses, lost wages, or pain and suffering you experience as a result of an accident. You will also be responsible for the other involved motorist’s damages, including medical bills, lost wages, vehicle damage, and more. This is true even if you were not at fault for the accident. An “uninsured” driver can still be held financially liable for an accident even if they were 100% not to blame for the crash.

How to Protect Yourself as an Out-of-State Driver

If you plan on driving a vehicle in the state of Michigan—whether you are a college student, visiting the state on vacation, or coming here to work temporarily—the best way to ensure that you are protected is to obtain Michigan no-fault auto insurance coverage. Without this coverage, you could find yourself facing serious financial hardships with very little to no legal recourse.

If you would like to learn more, or if you have already been injured in a car accident in Michigan, contact Goodman Acker today. Our attorneys can answer your questions and provide the personalized legal counsel you need. We serve clients in Detroit and throughout the surrounding areas.