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Michigan’s no-fault car insurance system can be confusing for many drivers. As a car accident attorney serving clients throughout Michigan, Davis Law Center recognizes the importance of understanding how this unique system works and how it affects you in the event of an accident.
What Is No-Fault Insurance?
Michigan’s no-fault insurance system requires all drivers to carry personal injury protection (PIP) coverage. Your PIP policy pays for your lost wages and medical expenses if a car accident results in your injuries, regardless of who was at fault.
- No-fault insurance applies to injuries sustained by drivers, passengers, and pedestrians involved in the crash.
- PIP coverage doesn’t apply to vehicles or property.
Required Coverage Under Michigan’s No-Fault System
Under Michigan law, all drivers must carry the following minimum coverage:
- Personal Injury Protection (PIP)
- Property Protection Insurance (PPI)
- Residual Liability Insurance (BI/PD)
Personal Injury Protection (PIP)
PIP policies cover your medical expenses, lost wages, and replacement services if you are injured in a car accident. As of July 2020, Michigan law allows drivers to choose from six levels of PIP coverage:
- Unlimited coverage
- $500,000 limit
- $250,000 limit
- $250,000 limit with PIP medical exclusions
- $50,000 limit (Medicaid-eligible only)
- Opt-out (Medicare-eligible only)
It’s essential to understand the implications of each coverage level. While lower limits may result in lower premiums, they also provide less protection in a serious accident. Opting out of PIP coverage entirely is only an option for those enrolled in Medicare, and it may leave you with significant medical expenses if you are injured in an accident.
Furthermore, PIP coverage extends beyond medical expenses. It can also provide:
- Up to 85% of your lost wages for up to three years if you cannot work due to accident-related injuries.
- Replacement services, such as household help, if your injuries prevent you from doing these tasks.
- Attendant Care (home nursing services provided by either friends or family or an agency.)
- Survivor’s loss benefits to your dependents if you are killed in a car accident.
Property Protection Insurance (PPI)
PPI coverage pays for damage your vehicle causes to other people’s property, such as buildings, fences, or parked cars. The minimum required PPI coverage is $1 million.
It’s important to note that PPI does not cover damage to another person’s vehicle unless it was parked at the time of the accident. You would need to rely on your collision coverage or the other driver’s insurance for damage to other vehicles.
Property Damage (PD)
PD coverage in Michigan requires a minimum coverage of $10,000 to protect you if you cause damage to another individual’s vehicle outside of the state of Michigan. If you have ever taken a damaged vehicle for repairs, you know $10,000 barely covers anything. This is why we recommend at least $100,000 of PD coverage.
Residual Liability Insurance
Residual liability insurance, called bodily injury and property liability coverage in other states, covers injuries and property damage others incur when you cause a crash. The minimum required coverage is:
- $250,000 per person for bodily injury
- $500,000 per accident for bodily injury
While drivers may choose to lower the coverage to $50,000 per person and $100,000 per accident, these are minimum requirements. We believe it’s smart to purchase higher limits to protect yourself in the event of a serious accident. If you are at fault and the other party’s losses exceed your liability coverage, they could sue you for the remaining amount.
Limitations of No-Fault Coverage
While Michigan’s no-fault system provides essential benefits, it also has limitations:
- No-fault insurance does not cover vehicle damage. For this, you need collision and comprehensive coverage.
- Pain and suffering compensation is only available if your injuries meet certain thresholds, such as serious impairment of a body function, permanent disfigurement, or death. You also must prove the other driver was more than 50% the cause of the crash.
How Davis Law Center Can Help With Your Michigan Car Accident Claim
At Davis Law Center, we understand the complexities of Michigan’s no-fault insurance system and how to fight for the compensation our clients deserve. Our skilled car accident attorneys work directly with you, handling all aspects of your claim and advocating for your best interests.
If you or a loved one has been injured in a car accident, don’t hesitate to contact our office. We’ll give you a free consultation, answering your questions, listening to your story, and helping you understand your legal options. With Davis Law Center on your side, you can worry about getting better while we fight for the justice and compensation you deserve.
Davis Law Center: your trusted partner for personal injury accident cases. Serving Detroit, Farmington Hills, Southfield, Macon County, Wayne County, Oakland County, and all of Michigan.