Michigan No-Fault Car Insurance

If you're injured in a car accident in Michigan, your own car insurance will cover your medical bills and other out-of-pocket losses, at least initially.

By , J.D. · University of San Francisco School of Law

Vehicle owners in Michigan are probably aware that they're in a "no-fault" car insurance state, which means they'll turn first (and often exclusively) to their own car insurance coverage if they're injured in a car accident, regardless of who caused the crash. In this article, we'll cover:

  • how Michigan's no-fault car insurance system works, including changes that took effect in 2020
  • special coverage that applies when you're at fault for a car accident
  • required insurance coverage and optional coverage available in Michigan, and
  • penalties for driving without car insurance in Michigan.

No-Fault Car Insurance In Michigan

Michigan is one of about a dozen states that follow some variation of a "no-fault" car insurance system. In a no-fault scheme, your own car insurance coverage (in Michigan, that means your "personal injury protection" or "PIP" coverage) pays for your medical treatment and other out-of-pocket losses after a car accident, up to policy limits, regardless of who caused the crash.

Who Is Covered Under No-Fault/PIP Car Insurance In Michigan?

It's not just the policyholder who is entitled to PIP coverage in Michigan. PIP benefits are also available to:

  • any family member living in the policyholder's house (even when the family member is a passenger in another person's car, or is injured in a traffic accident as a pedestrian)
  • any passenger or pedestrian who does not have their own no-fault policy, and gets hurt in an accident involving the policyholder's car, and
  • any motorcyclist who is hurt in a traffic accident involving the policyholder's car.

What No-Fault/PIP Benefits Are Available In Michigan?

The benefits provided by PIP coverage include:

  • all costs of medical care made necessary by the accident
  • wages lost due to the injury (up to 85 percent of income you would've earned if you hadn't gotten hurt, for up to three years, although the exact amount you can recover for lost income changes every year), and
  • up to $20 per day in "replacement services"—for someone to take care of household chores that you're unable to perform because of the accident, for example.

Is There a Time Limit for Making a No-Fault/PIP Claim In Michigan?

Yes. Any claim for PIP car insurance benefits needs to be filed within one year of the car accident, unless:

  • you've given written notice of your injuries to the insurer within one year of the accident, or
  • the insurer has already made one or more payments of PIP benefits in connection with the accident and your resulting injuries.

This rule is set by Michigan Compiled Laws section 500.3145.

It's important to differentiate between this time limit for filing a claim for PIP insurance benefits, and Michigan's statute of limitations for filing a lawsuit over car accident injuries. That statute of limitations gives you three years to file a court case against the driver who caused your car accident, assuming the seriousness of your injuries means you're able to step outside the confines of the no-fault system and file a lawsuit (more on this option later).

When Must a PIP Claim Be Paid Under Michigan No-Fault Rules?

PIP claims are supposed to be paid "as loss accrues," meaning that as you're receiving medical treatment (and medical bills) or experiencing lost income related to your car accident injuries, you can submit a PIP claim (or claims) on an ongoing basis.

In most situations, an insurance company's payment of PIP benefits to a claimant will be considered "overdue" if not paid within 30 days after the insurer receives "reasonable proof" of the loss claimed, including details on the amount of the loss. So, for example, once the insurance company receives your medical bills or your proof of lost wages in connection with a PIP claim, they have 30 days to pay your claim.

This rule is set by Michigan Compiled Laws section 500.3142.

What Is "Choice" PIP Coverage In Michigan?

Michigan drivers can choose the level of PIP medical coverage that's right for them, under changes that took effect in 2020. According to the state's Department of Insurance and Financial Services:

  • Insurance companies are required to reduce the premium customers must pay for PIP coverage based on the level of coverage chosen.
  • Customers can choose different levels of Bodily Injury and Property Damage (BI/PD) coverage, which will also affect the premium.
  • Customers' total premium and potential savings will depend on the coverages they select.
  • Car insurance companies must provide customers with forms detailing the benefits and risks of the coverage options.

The new "choice" rules we've described here pertain to new car insurance policies issued or renewed after July 1, 2020. For details on the Michigan car insurance rules as they apply to policies issued on or before July 1, 2020, check out this online pamphlet from the Michigan Department of Insurance and Financial Services.

Michigan No-Fault "Property Protection Insurance"

The "Property Protection Insurance" component of Michigan's no-fault rules will pay up to $1 million in any damage your car does to another person's property in Michigan—for example, if your car hits a building. PPI will only pay for damage your car does to another vehicle if the vehicle was properly parked. It won't cover vehicle damage caused by an accident between moving vehicles, and it won't apply to damage to your own vehicle.

Michigan No-Fault and Liability Claims

Michigan no-fault insurance provides "residual liability" protection which "pays your defense costs and any damages you are found liable for as the result of an auto accident, up to the limits of the policy," according to the Michigan Department of Insurance and Financial Services. In other words, if you're found legally at fault for a car accident, your no-fault policy will provide the following minimum amounts of coverage (you can pay more for higher limits):

  • $20,000 per person hurt or killed in an accident
  • $40,000 per accident in which more than one person is hurt or killed, and
  • $10,000 per accident for property damage for an accident that occurs in another state.

It's important to note that with a PIP/no-fault claim, you can't get compensation for your "pain and suffering" and other non-monetary damages stemming from the accident.

Filing a Car Accident Lawsuit In Michigan

In order to step outside of the no-fault system and file a third-party insurance claim or lawsuit against the at-fault driver in Michigan (so that "pain and suffering" and other non-economic losses are on the table):

  • the accident must have caused serious impairment of a bodily function, permanent and serious disfigurement, or death
  • the at-fault driver must be a non-resident whose vehicle is not insured in Michigan
  • the accident must have occurred in another state, or
  • the suit must be for $1,000 or less in damage to your car, the damage must not not covered by your own insurance, and the other driver must be 50 percent or more at fault.

If one or more of these thresholds is met, you can hold the at-fault driver responsible for the accident via a third-party car insurance claim or personal injury lawsuit, and you can pursue compensation for all categories of losses, including (for injury cases) pain and suffering and all other available non-economic damages (which, again, aren't available in a no-fault/PIP claim).

Get more details on how Michigan's car accident laws might affect a lawsuit filed in the state's courts after a crash.

No More "Amnesty" For Uninsured Drivers In Michigan

Through 2021, Michiganders who had recently driven without car insurance could purchase a new policy or reinstate an old one without being charged higher rates or reinstatement fees. But the "amnesty" period closed on January 1, 2022.

Can I Show Digital Proof of Car Insurance In Michigan?

Yes, under Michigan Vehicle Code section 257.328, you can provide digital evidence that your vehicle is insured (such as a digital version of the insurance card issued to you by your car insurance company) when asked for proof of insurance during a traffic stop or after a car accident. Of course, you can still carry a hard copy of your insurance card or other proof of car insurance.

What Are the Penalties for Driving Without Car Insurance In Michigan?

According to the Michigan Department of Insurance and Financial Services, driving without insurance in the state is a misdemeanor, and violators could face:

  • a fine of up to $500
  • up to one year in jail
  • driver's license suspension for 30 days, or until able to provide proof of valid insurance.

And keep in mind that these penalties might pale in comparison to the financial liability you could face if you cause a serious car accident and you don't have insurance. At that point, you're on the hook for anyone else's injuries, vehicle damage, and other crash-related losses.

Michigan's "No Pay, No Play" Law

Michigan's "no pay, no play" law creates another, somewhat secondary penalty for driving without insurance, which applies if you end up filing a lawsuit for your car accident injuries.

If you were driving without insurance at the time of the crash, and the case goes to trial, you'll be barred from recovering "non-economic" damages in court even if you win your case. (Michigan Compiled Laws section 500.3135(2)(c).)

This is a big deal because, as we've already discussed, non-economic damages include compensation for your physical and mental "pain and suffering," and losses like these are often the biggest determinants of car accident case value.

Learn more about what happens if you're in a car accident and you're uninsured.

Getting Help After a Car Accident in Michigan

Learn more about the ins and outs of Michigan's car insurance rules, straight from the state's Department of Insurance and Financial Services:

You can also learn more about:

If you've been involved in a car accident in Michigan, and you want information that's tailored to your situation—including your options for recovering for the full spectrum of your losses—it might make sense to talk with an experienced lawyer. Learn more about how an attorney can help with your car accident case.

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