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. In this article, we'll discuss:
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.
It's not just the policyholder who is entitled to PIP coverage in Michigan. PIP benefits are also available to:
The benefits provided by PIP coverage include:
"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:
Learn more about Michigan's new auto insurance law (from the state's Department of Insurance and Financial Services). 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.
Limited Vehicle Damage Protection
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 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):
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):
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).
Under recent changes to Michigan's car insurance laws, people who have driven without car insurance in recent years can purchase a new policy or reinstate an old one without being charged higher rates or reinstatement fees. In order to receive these protections, previously uninsured Michigan drivers must apply for new coverage before the "amnesty" period closes on January 1, 2022.
If you've been involved in a car accident in Michigan, and you want to understand your state's laws as they apply 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.