A Student Guide to Michigan No-Fault Insurance (Plus … Advice for Michigan Students Attending College Elsewhere)

People unfamiliar with Michigan’s somewhat unusual no-fault insurance laws have a few concerns or questions about coming here for college. For example, what happens if you’re insured in another state and get in an accident in Michigan? Should a college student attending a Michigan university obtain an insurance policy issued here? And what about Michiganders who choose to attend college in another state that doesn’t have a no-fault insurance requirement? This article answers those questions and more, to shed light on Michigan auto insurance laws and how they impact college students in particular. 

Does an out-of-state student need a Michigan no-fault insurance policy?

 
You may have been hoping otherwise, but the answer is almost certainly yes. If a college student will have access to a car in Michigan for more than 30 days in a calendar year, Michigan law requires that student to obtain a no-fault policy issued by a company licensed to operate in the state. “College students are starting the semester and moving into dorm rooms, off-campus apartments, or other rented housing, and these changes may mean their insurance needs may have changed,” said Michigan Department of Insurance and Financial Services (DIFS) Director Anita Fox. “It is critical that college students and their families discuss their situation with a licensed insurance agent or company to make sure they have the appropriate insurance coverage they need to protect themselves, their families, and their belongings.”

Here’s why: If the student is pulled over for speeding or some other seemingly minor infraction and can’t prove they have a Michigan-approved no-fault insurance policy, the penalties for driving while “uninsured” (which is what the law specifies when there is no Michigan-based insurance in place) can be drastic. Being uninsured when driving in Michigan is considered a criminal offense and comes with fines up to $500… and even the potential for prison time. Specifically, Michigan law states that “An owner (editor’s note: a college student driving a family-owned car will be legally considered the owner even if their name isn’t listed on the car’s title)… who operates the motor vehicle or motorcycle or permits it to be operated upon a public highway in this state, without having in full force and effect security complying with this section or section 3101 or 3103 is guilty of a misdemeanor. A person convicted of a misdemeanor under this section shall be fined not less than $200.00 nor more than $500.00, imprisoned for not more than 1 year, or both.” In other words, out-of-state college students who drive without no-fault insurance policies in Michigan can be considered criminals and treated as such.

Beyond that, there are many other compelling reasons to have an approved no-fault policy. Without no-fault insurance coverage you may be on the hook for some or all of your own medical costs, even if you have health insurance, and regardless of whether you caused the accident. Additionally, if you are found at-fault for the accident you or your parents, if they own the car, could be held liable for damages from anyone else involved in the accident. This could amount to millions of dollars out of your or your parents’ pocket.

I don’t want to be on the hook for millions of dollars. How does an out-of-state student obtain no-fault insurance in Michigan?

 
Because the policy must be issued by a company licensed to operate in Michigan, it can be a challenge. The Michigan Department of Insurance and Financial Services (DIFS) offers this advice to students who will have cars in Michigan more than 30 days in a calendar year:  “(Students should) make a written statement of their intention to drive in Michigan for 30 days or more on a form approved by the Director of the Michigan DIFS in order to obtain a no-fault auto policy. Each insurer is responsible for developing its own form and submitting to DFIS for review and approval. If a consumer has a concern that cannot be resolved directly with their insurer, contact the Michigan Department of Insurance and Financial Services Monday through Friday 8 a.m. to 5 p.m. at 833-ASK-DIFS (833-275-3437) or via email at AutoInsurance@michigan.gov.”

In other words, speak with your auto insurance representative ASAP. To find a company licensed to sell no-fault car insurance policies in Michigan, we first suggest checking this list developed by ValuePenguin. Another good place to start may be your family’s current insurer, especially if they’re listed there. For additional details on what you may need, the University of Michigan has published some auto insurance advice for its out-of-state students. If you’re attending another Michigan-based educational institution, we suggest checking with your particular school’s admissions office to seek their advice on this topic. 

I’m a Michigan student planning to attend college in another state. Am I required to get car insurance there?

 
Since there are 50 states, there are probably at least 49 different answers to this question! However, the fact that only about a dozen states have no-fault insurance similar to Michigan may complicate things. Our best advice would be to contact the admissions office of the school you’re attending and ask for their assistance. If they can’t help, the next step would be to call your current insurance agent to see if the company has policies in place to address students in your situation. Value Penguin notes it’s generally “illegal to live in one state and register your car in another,” and doing so can result in your insurance company voiding your policy if they find out that’s the case. However, there are sometimes exceptions for college students, so there’s no hard and fast rule that applies here. As attorneys, we strongly suggest that you document any advice you receive in writing, which means the best way to pose questions to college officials or insurance agents about coverage requirements is probably via email.

This all sounds expensive – can’t I get some discounts as a college student?

 
Good news! Many insurers offer so-called “good student” discounts or will reduce insurance premiums for students who are studying away from home.  However, you’ll need to check with your insurance company to determine if you qualify for these rate reductions (and a few more). Of course, the best way to save money is probably not to bring a car to campus at all, which means less spending on gas, and more for pizza (priorities!). 

What if I’m an out-of-state student who’s injured while I’m in Michigan?

 
Here’s one question with an easy answer. First call home and let your parents know you’re okay. Then call us right away at 855-MIKE-WINS (855-645-3946). Even if you think you might not have insurance, give us a call and we can give you a more definite answer based on the facts of your specific case. If you’re ever hurt in Michigan – whether due to a car crash, a work-related injury, a fall on an icy college sidewalk, a nasty bite by a neighbor’s watchdog or some other unexpected hazard – we’ll be there for you immediately to help you get the compensation you need. So, study hard, stay safe, remember our number, and have a great school year!

Content checked by Mike Morse, personal injury attorney with Mike Morse Injury Law Firm. Mike Morse is the founder of Mike Morse Law Firm, the largest personal injury law firm in Michigan. Since being founded in 1995, Mike Morse Law Firm has grown to over 200 employees, served 40,000 clients, and collected more than $1.5 billion for victims of auto, truck and motorcycle accidents. The main office is in Southfield, MI but you can also find us in Detroit, Sterling Heights and many other locations.