Out of State Student Guide to Car Insurance in Michigan
The number of out-of-state students attending colleges in Michigan is on the rise every year. This includes both undergraduate and graduate students. Many out-of-state students have automobiles with them, either on campus or at their off-campus residence, for a number of reasons. In most cases, the vehicle is registered and insured in their home state.
However, this can present some potential legal pitfalls. Without having a required auto insurance policy or vehicle properly titled under Michigan law, this can present some serious consequences. It is essential that students and their parents understand the law and what they should do to comply with the insurance requirements.
Every state in the United States has completely different auto insurance requirements for vehicle owners and drivers. Overall, it does not present any legal issues when a resident of one state drives a car through another state for business or travel. However, the requirements can change depending on the length of time a vehicle owned in one state is kept or driven in another state.
The failure to comply with a particular state’s insurance laws can have serious legal consequences. A student may unknowingly be non-compliant with the requirements. As a result, a vehicle not properly insured can result in civil infractions and have a significant adverse effect on the legal rights of a student involved in a motor vehicle accident.
The State of Michigan has very unique auto insurance laws. The Michigan No-Fault Insurance Laws are stated in MCL 500.3101 and its sub-parts. In general, it specifies the requirements for the owner or registrant of a vehicle in Michigan to have a car insurance policy.
If you are an out-of-state college student attending a college in Michigan, you may be required to have your automobile insured to comply with the legal insurance requirements in this state.
This guide will explain the Michigan laws and potential legal pitfalls on non-compliance with Michigan insurance requirements. This should help you determine if you need to change your current auto insurance coverage or add supplemental coverage to your existing policy.
Colleges, Universities & Technical Schools in Michigan
The State of Michigan has ninety-three colleges and universities located within its borders. There are also a significant number of graduate programs and technical schools located in the Great Lakes State. There are also many non-resident researchers, visiting professors, and others who spend a large portion of their time at colleges in this state.
The schools with the largest enrollment are public universities. These include Michigan State University (50,340), University of Michigan (44,718), Wayne State University (27,238), Central Michigan University (25,986), Grand Valley State University (25,460), and Western Michigan University (23,227).
In addition, there are many smaller public and private colleges located in Michigan. These include Davenport University (7,733), Calvin University (3,918), Northwood University (3,545) Spring Arbor (3,341), Madonna University (3,298), Hope College (3,234), and Adrian College (1,684). These schools also attract a number of out-of-state and foreign students.
Further, Michigan is home to some outstanding graduate schools and programs. This includes nine medical schools, two dental schools, and five law schools. There are also a number of graduate programs in nursing, business, social work, and other areas of specialization.
A large number of those students are from other states and countries. For example, the University of Michigan (Ann Arbor Campus) has a very high percentage of its student population from another state or country. In 2020, The University had 23,795 in-state students and 22,921 out-of-state students.
And, for graduate and professional programs, the University had 9,397 out-state versus 7,427 in-state students. Other schools and programs throughout Michigan also had a significant number of non-resident students.
Michigan Car Accident Statistics
The Michigan State Police Traffic Crash Reporting Unit of the Michigan State Police reported 314,377 motor vehicle accidents in 2019. A large number of people injured and killed in crashes were vehicle passengers, motorcyclists, bicyclists, and pedestrians. Students walking and riding bicycles on campuses are very vulnerable to be hit by inattentive, negligent, intoxicated, and distracted drivers.
While the number of total car accidents in Michigan has slightly decreased in recent years, the number of fatal crashes has risen. This increase in motor vehicle deaths is surprising in light of safety advances made in vehicles over the last twenty years, but distracted driving is now a big factor.
As a result of the large number of accidents, it has never been more important to have the proper insurance coverage on your vehicle. This is true for students involved in motor vehicles, either as a victim of someone else’s negligence and even for those at fault in causing a crash.
Do Out of State Students Need to Buy Michigan No-Fault Insurance?
The general answer to this is “Yes.” Recent changes to Michigan No-Fault laws have made this requirement even more important.
For the most part, prior to these changes, an out-of-state student studying in Michigan could rely on the insurance policy issued in their home state. Now, the failure to have the vehicle insured in Michigan can have devastating consequences.
Previously, a student was covered under the policy of their primary residence or where the vehicle was registered with the Department of Motor Vehicles. There are several provisions of the new law which make now it necessary to now insure the same vehicle in Michigan.
Currently, if you drive for more than thirty (30 days) in Michigan, you must obtain a separate Michigan no-fault auto insurance policy. This is true whether you drive the vehicle for 30 consecutive days or 30 cumulative days in a calendar year. The failure to do so can result in specific penalties and also have a serious impact if you are involved in a Michigan car accident.
In addition, the same laws apply to other out of state residents spending significant time in Michigan. These include academic researchers, scientists, visiting professors, coaches, and even non-enrolled athletes spending a considerable amount of time training on campus.
What is the 30-Day Owner Rule?
The 30-Day Rule basically states that a person who operates an automobile in Michigan for more than 30 days in a calendar year is deemed an “owner” of that vehicle in the state.
Because the statute requires all owners to have Michigan No-Fault Insurance, a student studying in the state would be considered uninsured without the required coverage.
What is the Legal Effect of Not Having Michigan Coverage?
Under Michigan law, a person injured by a motor vehicle can generally sue a negligent or reckless driver that causes the accident for personal injury compensation. These cases demand settlements for pain and suffering, disfigurement, disability, and other damages caused by a crash. These cases can result in substantial settlements for an injury victim.
However, an uninsured driver operating his or her own vehicle cannot sue a negligent driver for this type of claim. This is true even if the victim is not at fault for the accident, even if hit by a drunk driver or distracted driver. So, if an out-of-state college student is deemed the “owner” of a vehicle because it is operated for more than 30 days in Michigan, then the right to sue is lost unless there is a Michigan No-Fault Insurance policy in effect at the time.
In addition, you will not be eligible for first-party no-fault benefits. These benefits include payment for lost wages, medical bills, and other expenses. The insurance company will simply deny your claim to these very important and essential benefits.
What Auto Insurance Should Out of State Students Get for Michigan?
Students and others in the same situation should purchase Michigan No-Fault insurance coverage for the period of their school attendance in the state.
There are two options for securing this coverage. The student can contact the insurance company that issued the policy in another state and ask if it offers additional coverage that complies with the Michigan laws. Or, you can contact an auto insurer in Michigan to purchase the same coverage as a person with a vehicle registered in the state.
We recommend you purchase liability coverage with a minimum of $100,000. This will best protect you in the event that you are sued for causing an injury to another driver, bicyclist, motorcyclist or pedestrian.
In addition, we recommend that you also buy uninsured motorist and underinsured motorist coverage with at least those same limits. These coverages are relatively inexpensive and often included with your policy premium. They can protect you in the event you are injured by another driver without insurance or with liability limits too low to compensate a person with very serious and permanent injuries.
Further, you can determine the amount of your medical payment limits with your policy. If you have coordinated health insurance coverage, you may choose a lower medical bill payment limit.
However, we recommend purchasing unlimited medical coverage in all cases because it covers many expenses that are not paid by traditional health insurance. This will best protect you in the event the injuries are catastrophic and require extensive medical treatment.
There is obviously a differential in the policy premium based upon coverages chosen, but it is definitely a smart thing to buy if you can afford the higher premium. It is wise to shop around different insurance companies to get the best coverage at the lowest premium amount.
Largest Auto Insurance Companies in Michigan
You can buy your policy from any insurer certified to sell car insurance in Michigan. The largest auto insurance companies issuing policies in Michigan are:
Auto Club Insurance Association (AAA)
The Hanover Insurance Group (Citizens)
Michigan Farm Bureau
The Hartford Group
Pioneer State Insurance Company
State Auto Insurance Company
And, if the vehicle insurer in your home state is certified in Michigan, you can use the same insurer for your Michigan No-Fault insurance coverage.
Do I Need to Register my Vehicle in Michigan?
If you are an out-of-state student or other individual who has a car in Michigan for more than 90 days, you will must register your vehicle with the state.
You will need to register it with the Michigan Secretary of State even if it is also registered with the DMV in your own state.
Are there Criminal Penalties for not having Michigan Car Insurance?
There are penalties for being an uninsured driver in Michigan. These include:
A sentence of up to one year in jail
Fines ranging from $200 – $500
A person ticketed, cited, or charged for not having the required auto insurance may also face court costs for the violation. In addition, if an attorney is needed there will be legal expenses.
Take These Actions to Properly Insure and Register Your Vehicle Today
Michigan is a great place for out-of-state students to attend college and graduate schools. Every out of state student who plans to have an automobile while attending school in this state must get auto insurance that complies with state statute. The same is true for others working at colleges in the state.
Either before you arrive in Michigan, or within the first 30 days in the state, we suggest that you:
Contact your current auto insurance policy to add Michigan No-Fault insurance coverage, or contact another insurer that offers the coverage.
Choose the options that provide the best bodily injury, uninsured motorist, underinsured motorist, and no-fault coverage you can afford.
Purchase the policy and obtain a Certificate of Insurance.
Go to the Secretary of State Office to register your out of state vehicle in Michigan. You will need your Vehicle Title and your Certificate of Michigan No-Fault Insurance. Pay all fees and your vehicle should then be properly registered and insured.
The failure to do these required things can have serious civil and criminal consequences and can prove more expensive than the cost of the policy. It is smart to explore all of your insurance options before even arriving in Michigan if you plan to use your vehicle in the state for more than 30 days in a calendar year.