Vehicle owners in Michigan are probably aware that they're in a "no-fault" car insurance state, which means their options for pursuing a claim are often limited if they're injured in a car accident. In this article, we'll cover the details of Michigan's no-fault car insurance system.
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:
PIP benefits are capped at an amount that is revised annually in Michigan.
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):
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. 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).
The Michigan Department of Insurance and Financial Services offers several helpful resources on no-fault insurance coverage in Michigan, including A Brief Explanation of Michigan No-Fault Insurance.