Hit by an Out‑of‑State Driver in Michigan: Who Pays Your Bills?

Key Takeaways

• In Michigan, your Personal Injury Protection (PIP) coverage pays your medical bills and lost wages, even if an out-of-state driver caused the car accident.
• The at-fault driver’s insurance comes later. You can pursue their policy for pain and suffering and expenses beyond your PIP limits, but only if your injuries meet Michigan’s legal threshold.
• Out-of-state drivers usually don’t have Michigan PIP. Their insurance typically won’t contribute to your no-fault benefits, so your policy carries the full responsibility on that side.
• Coverage limits may be lower. Drivers from states like Illinois and Indiana often carry lower liability limits, which can restrict how much compensation is available.
• Vehicle damage is handled separately. Your collision coverage may pay for repairs, and you can file a limited mini-tort claim against the at-fault driver for out-of-pocket costs.
• Your own policy may fill the gaps. If the other driver’s coverage isn’t enough, your uninsured or underinsured motorist coverage may help, depending on your policy.

If you drive anywhere in Southwest Michigan during the summer, you already know how crowded the roads get. Traffic along I-94, US-31, and the main routes into towns like St. Joseph, New Buffalo, and South Haven increases sharply as visitors arrive from Illinois and Indiana. Many of those drivers are unfamiliar with local roads, traffic patterns, and congestion points, which raises the risk of auto accidents.

When a crash happens and the at-fault driver is from out of state, you might assume their insurance will pay your medical expenses. However, Michigan uses a no-fault system, which means your own insurance is usually responsible for paying your initial expenses, regardless of who caused the collision. You can pursue their insurance company for additional coverage, but it may dispute responsibility, delay payments, or apply limits that don’t match Michigan standards.

In this guide, we explain who pays your bills after a Michigan car accident with an out-of-state driver. We also explain how these insurance claims work, where problems tend to arise, and what you can do to protect your rights after a collision in Southwest Michigan.

Michigan’s No-Fault System: What It Means for You After a Car Accident

When you’re injured in a motor vehicle collision, your claim starts with your own auto insurance policy. Michigan follows a no-fault system, which means your auto insurer is responsible for paying certain insurance benefits regardless of who caused the motor vehicle accident. This applies even when the driver who hit you is clearly at fault and even from another state.

The primary source of these no-fault benefits is Personal Injury Protection, known as PIP. PIP pays for your medical expenses related to the car accident, including hospital visits, rehabilitation, and ongoing treatment. It also pays a portion of your lost wages if you can’t work, along with replacement services for everyday tasks you can’t perform because of your injuries.

Michigan law sets a priority order for which insurance policy pays PIP benefits. In most cases, you first turn to your own auto insurance policy. If you don’t have one, the next step may be a spouse’s policy or a policy from a household relative. If no coverage exists there, then you turn to the Michigan Assigned Claims Plan.

This priority system applies the same way when the at-fault driver is from Illinois, Indiana, or any other state. Their insurance company does not pay your medical bills at the start of your claim. Instead, your recovery begins with your own coverage, which is intended to provide prompt payment for your immediate needs.

What Changes When the At-Fault Driver Is From Another State?

A crash involving an out-of-state driver still follows Michigan’s no-fault rules at the start, but differences show up as your claim develops. These differences can affect available coverage limits, claim handling, and insurer responses.

When Can You File a Claim Against the At-Fault Driver?

The at-fault driver’s insurance becomes relevant after your PIP claim is underway. At that point, you may bring a claim for pain and suffering damages if your injuries meet Michigan’s legal threshold, defined as death, permanent serious disfigurement, or a serious impairment of body function. You may also seek payment for medical expenses and wage loss that exceed your PIP limits.

To recover those damages, you must prove the other driver caused the crash. Michigan law governs that claim because the car accident occurred here, even if the driver and their policy are based in another state. This part of the case is separate from your PIP benefits and follows a different track.

Coverage Limits May Be Lower Than You Expect

Insurance requirements vary by state, and many states have lower liability limits than Michigan. Drivers from Illinois or Indiana, for example, may carry policies with limited coverage. In a serious crash, those limits may not be enough to fully compensate you. See below.

State	Minimum Liability (Per Person)	Minimum Liability (Per Accident)	Notes
Michigan	$250,000	$500,000	Some Michigan drivers reduce their limits $50,000 / $100,000
Illinois	$25,000	$50,000	Lower minimums than Michigan
Indiana	$25,000	$50,000	Lower minimums than Michigan

Insurance Companies May Handle the Claim Differently

Out-of-state insurers may apply rules from their home state when reviewing your claim. That can lead to disputes about liability, damages, or coverage. In some cases, claims adjusters may question how Michigan’s no-fault system works.

Communication between insurers can also slow progress. Your insurer and the out-of-state insurer may take different positions on the claim, which can delay resolution of the case against the at-fault driver. During that time, your PIP benefits continue through your own policy while the claim against the other driver develops separately.

What If the Out-of-State Driver Does Not Carry Michigan No-Fault Coverage?

When the driver who hit you is from another state, their insurance usually does not include Michigan no-fault benefits. That is because most states do not require the type of Personal Injury Protection coverage that Michigan does. As a result, their policy is not set up to pay the kinds of insurance benefits your own policy provides.

Michigan law does require non-residents to carry Michigan no-fault insurance if they drive in the state for more than 30 days in a year. In practice, most out-of-state drivers involved in Michigan car accidents are short-term visitors. They are driving on policies issued in their home state, and those policies follow that state’s rules.

For you, this does not change where your claim starts. Your own PIP coverage remains responsible for your medical bills and wage loss benefits. Where it becomes important is in the second part of your claim. Because the other driver does not carry Michigan no-fault coverage, their insurer is not contributing to your PIP benefits. That means any recovery from their policy will come through a liability claim, which depends on proving fault and suffering a threshold injury.

This situation can also affect the total amount of financial compensation available to you. If the at-fault driver carries a policy with lower limits, there may be less auto insurance available to pay damages to you. In those cases, your own uninsured or underinsured motorist coverage may play a role.

Property Damage Is Handled Separately

Damage to your vehicle follows a different path than your injury claim. Michigan’s no-fault system applies to medical bills and wage loss, but it does not cover repairs to your car. That part of your claim depends on the type of coverage you carry and, in some cases, a separate claim against the at-fault driver.

If you have collision coverage, your own insurer will usually pay to repair or replace your vehicle. You may be responsible for a deductible, depending on your policy. Using your own coverage is typically the fastest way to address vehicle damage, especially when the other driver is from another state.

Michigan law also allows a limited claim against the at-fault driver for vehicle damage. This is known as a mini-tort claim. It allows you to recover up to $3,000 for out-of-pocket costs, such as your deductible, if the other driver is found to be at fault. But when the at-fault driver is from another state, their insurer may not be familiar with Michigan’s mini-tort rules. That can lead to delays or disputes about what they owe. 

What If You Don’t Have Insurance or Your Coverage Is Not Enough?

If you do not have auto insurance at the time of the crash, your options are limited. In most cases, you can’t recover Personal Injury Protection benefits through your own policy because no policy exists. You may also lose the ability to pursue full compensation for pain and suffering, even if the other driver caused the accident.

There are limited situations where coverage may still be available. If you live with a relative who has auto insurance, their policy may apply to your claim. The same can be true for a spouse’s policy. But if no coverage is available through you or your household, you may be able to apply through the Michigan Assigned Claims Plan, which provides access to PIP benefits when no other insurance applies. However, the benefits available through this plan are limited compared to a standard no-fault policy.

Questions? Speak to a Michigan Car Accident Attorney Now!

If you’ve been hit by an out-of-state driver in Southwest Michigan, you’re going to have a lot of questions. At Conybeare Injury and Accident Lawyers, we handle cases like this throughout St. Joseph, Benton Harbor, New Buffalo, and surrounding areas. We know how Michigan’s no-fault system applies when another state’s insurance is involved. We also know how to pursue claims against out-of-state drivers and deal with insurers that are not based in Michigan.

When you contact us, we review your insurance coverage, explain your options, and outline the next steps in your case. We also handle communication with insurance companies so you don’t have to manage those discussions on your own. Our goal is to protect your rights and help you pursue the compensation you need, so please call our personal injury law firm at (269) 983-0561 to schedule a free consultation with a Michigan attorney. Remember: if it’s not fair, call the Bear!