Michigan has many well-known and respected colleges and universities. Students come from all over the country to attend school in Michigan. While the biggest destination schools include the University of Michigan and Michigan State University, Grand Rapids and West Michigan have numerous area colleges that attract many different students from a variety of backgrounds and with unique career ambitions.
Those unfamiliar with West Michigan quickly come to realize that they likely need to have their own transportation to make the most of living in the area. That can raise a lot of questions about where to buy a vehicle and how to navigate Michigan’s unusual car insurance rules.
What do out-of-state college students living in Michigan need to know about Michigan’s no-fault insurance system?
Michigan requires no-fault and liability insurance
Drivers with vehicles registered in Michigan typically need to carry very costly insurance policies. Michigan has a no-fault insurance law that requires personal injury protection (PIP) coverage from almost all in-state drivers. Regardless of who is at fault for a crash, those operating vehicles registered in Michigan rely first on their own no-fault PIP coverage.
The state used to require unlimited PIP coverage for all drivers, but there are now other options available. Drivers can carry $500,000 in PIP coverage. Those who need certain state benefits and older adults can sometimes qualify for more affordable policies with reduced PIP coverage amounts or can bypass the requirement entirely.
The liability coverage of the other driver only applies in scenarios where the PIP coverage of the injured motorist is insufficient to pay their expenses. This arrangement does take much of the risk out of a crash, as drivers can feel confident that their own policy can cover their expenses instead of relying on someone else to pay for insurance. Unfortunately, no-fault requirements make insurance prohibitively expensive for many college students.
Out-of-state vehicles can be more affordable
States generally have insurance reciprocity rules, and Michigan is no exception. A vehicle registered in another state with an insurance policy issued in that state can drive elsewhere in the country without violating the law.
An out-of-state student living in Michigan can typically save a lot of money by registering their vehicle in their home state and purchasing insurance using their home address. Many young adults find the process of obtaining insurance and filing claims to be difficult and confusing. Particularly in cases where they have Michigan policies with PIP coverage, they may need to communicate with more than one insurance company and negotiate assertively to optimize the coverage that they receive.
Insurance companies in Michigan have adopted a very aggressive approach to claims involving substantial injuries because of the potential for unlimited medical coverage in some cases. As such, learning about insurance and how it works after a Michigan car crash can help out-of-state college students protect themselves from unpredictable, life-altering situations. No-fault PIP coverage can be beneficial for those with major injuries but can make insurance expensive and claims complex. It may sound cheesy, but when it comes to this subject, knowledge is power.
