Michigan Courts Mulling Tort Damages Bar for Non-Resident Drivers Involved in Car Accidents

Each year, Michigan welcomes millions of visitors who traverse the state’s highways and byways. While tourism and commerce benefit Michigan, the increased traffic also raises the likelihood of car accidents involving non-resident drivers. When these unfortunate events occur, the question of who is liable and what damages can be recovered becomes complex, especially given Michigan’s unique no-fault insurance system. Currently, Michigan courts are grappling with the issue of whether to bar non-resident drivers who fail to carry Michigan insurance from recovering tort damages after a car accident. This blog post will delve into the intricacies of this legal debate and explore its potential implications for both Michigan residents and out-of-state visitors.

Understanding Michigan’s No-Fault System

Michigan operates under a “no-fault” auto insurance system. In most car accidents, regardless of who is at fault, each driver’s own insurance policy pays for their medical expenses and lost wages. This system is designed to reduce the number of lawsuits and expedite the payment of claims. However, Michigan’s no-fault system primarily applies when an eligible policy exists. A Michigan resident with a valid, properly issued policy is covered. A non-resident, however, receives Personal Injury Protection (PIP) benefits only if their own insurer has filed a special certification with the Michigan Department of Insurance and Financial Services and the vehicle is registered elsewhere. Many insurers skip that certification. If they did, the visitor’s carrier has no PIP duty here. That gap forces injured locals to turn first to their own PIP coverage and, in some cases, to the Michigan Assigned Claims Plan for medical bills that exceed policy limits.

The Tort Threshold and Non-Economic Damages

While the no-fault system covers economic losses, such as medical bills and lost wages, it restricts lawsuits for non-economic damages like pain and suffering. In Michigan, an individual can only sue for pain and suffering if the accident results in death, serious impairment of body function, or permanent serious disfigurement. This is known as the “tort threshold.” Meeting this threshold is essential before a nonresident’s insurer will negotiate intangible damages. The medical evidence must show more than soft-tissue discomfort. Think fractured bones, traumatic brain injury, or scarring that changes appearance. While Michigan retains the threshold, the out-of-state driver’s policy language may mention different standards.

The Non-Resident Driver Dilemma

The legal landscape becomes even more complicated when a non-resident driver is involved in an accident in Michigan. Generally, non-residents who drive in Michigan for fewer than 30 days in a calendar year are covered by their home state’s auto insurance policy. However, those spending more than 30 days per year in Michigan must insure their vehicle with a Michigan no-fault policy.

Recent changes to Michigan’s no-fault law have raised questions about the rights of non-resident drivers who fail to obtain Michigan insurance despite driving in the state for more than 30 days annually. The central issue is whether these drivers should be barred from recovering tort damages for pain and suffering if they are injured in an accident.

The Goings v. Giacomantonio-Snow Case

The Michigan Supreme Court is currently considering this very issue in the case of Goings v. Giacomantonio-Snow. In this case, the Michigan Court of Appeals ruled that a non-resident who fails to comply with the car insurance obligation in MCL 500.3102(1) is not barred by MCL 500.3135(2)(c) from recovering tort damages for pain and suffering compensation.

However, during oral arguments before the Supreme Court, several justices expressed reservations about this decision. They questioned whether there would be any consequences for non-residents who should carry a Michigan policy but fail to do so if the court agrees with the Court of Appeals’ position.

Arguments For and Against Barring Tort Damages

There are valid arguments on both sides of this debate.

Arguments for barring tort damages:

Fairness to Michigan Residents: Proponents of barring tort damages argue that it is unfair to allow non-residents who flout Michigan’s insurance laws to recover damages that are not available to uninsured Michigan residents.
Incentive to Comply with the Law: Barring tort damages would incentivize non-residents to comply with Michigan’s insurance requirements, ensuring that all drivers on Michigan roads are adequately insured.
Protecting the No-Fault System: Allowing uninsured non-residents to sue for pain and suffering could undermine the no-fault system by increasing litigation and potentially driving up insurance costs for Michigan residents.

Arguments against barring tort damages:

Punishing the Innocent: Opponents argue that barring tort damages would punish innocent non-residents who are injured in accidents through no fault of their own.
Discrimination Against Non-Residents: Some argue that barring tort damages would discriminate against non-residents, violating their right to equal protection under the law.
Potential for Unjust Enrichment: If a negligent Michigan driver causes an accident that injures an uninsured non-resident, barring tort damages would allow the Michigan driver to escape full responsibility for their actions.

Practical Steps After a Crash

Regardless of the legal outcome, if you’re involved in a car accident with a non-resident driver in Michigan, here are some practical steps to take:

Document the Scene: Take photos of the scene, license plates, and insurance cards.
Seek Medical Attention: Get immediate medical attention, even for minor pain; doctor notes link injuries to the event.
Notify Your Insurer: Notify your own insurer as soon as possible to protect PIP benefits.
Obtain the Police Report: Request the police report and check whether the visiting driver received a citation.
Keep Records: Keep all billing statements and wage-loss records.
Consult an Attorney: As soon as you learn the at-fault driver is not a Michigan resident, consult a Michigan attorney who handles cross-border accident claims.

The Mini-Tort Exception

Even with the complexities of no-fault and potential limitations on recovering non-economic damages, Michigan law provides a “mini-tort” provision. Under Michigan’s revised mini-tort, you may collect up to $3,000 from the driver who caused the crash to cover your collision deductible or repairs if you carry limited property protection. Non-resident drivers remain subject to that rule while operating here. Their insurer must pay as long as liability is established. If the policy’s property damage limit is higher than Michigan’s mini-tort cap, you can still recover only the statutory maximum unless you can prove intentional damage or other narrow exceptions.

The Bottom Line

The Michigan Supreme Court’s decision in Goings v. Giacomantonio-Snow will have significant implications for non-resident drivers involved in car accidents in Michigan. Depending on the ruling, non-residents may face new hurdles in recovering damages for their injuries. It is essential to stay informed about these legal developments and seek legal advice if you are involved in an accident with a non-resident driver in Michigan.

If you have been injured in a car accident in Michigan, whether you are a resident or a non-resident, it is crucial to understand your rights and options. Contact our experienced personal injury attorneys today for a free consultation. We can help you navigate the complexities of Michigan’s no-fault system and fight for the compensation you deserve.