Michigan No-Fault Car Insurance Explained

At the Davis Law Center, we have noticed that Michigan’s no-fault car insurance system can be confusing for many drivers in Farmington Hills and throughout the State. As a car accident attorney serving clients for over three decades, Neil Davis at the Davis Law Center understands 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 generally requires all drivers to carry personal injury protection (PIP) coverage, with certain exceptions discussed below. If you are injured in an accident, your PIP policy can cover medical expenses, wage loss, medical mileage, and assistance with household chores or home nursing-type services (attendant care). These benefits are payable regardless of who was at fault. PIP coverage doesn’t apply to vehicle or property damage, however. Other coverages required by Michigan law are Property Protection Insurance (PPI) and Residual Liability Insurance (BI/PD). We provide an overview of the various coverages as follows:

Personal Injury Protection (PIP)

This is the “No-Fault” part of your automobile policy of insurance. PIP policies cover your medical expenses, lost wages, replacement services, medical mileage, and attendant care if you are injured in a car accident, regardless of who was at fault in the crash. As of July 2020, Michigan law allows drivers to choose from six levels of PIP coverage:

• Unlimited coverage (Davis Law Center’s recommendation).
• $500,000 limit
• $250,000 limit
• $250,000 limit with PIP medical exclusions
• $50,000 limit (Medicaid-eligible only)
• Opt-out (Medicare-eligible only)

We recommend unlimited PIP coverage because of the astronomical cost of medical care after serious injury accidents. We have had clients who opted for lower amounts, only to see those limits exhausted after a 24-hour hospital stay. At that point, and unless you have other insurance, you could be personally responsible for all past, present, and future medical care.

Aside from medical expenses PIP coverage can also provide:

• Up to 85% of your lost wages (subject to an annual cap) for up to three years from the date of the crash, if you cannot work due to accident-related injuries.
• Replacement services, such as household help, are available if your injuries prevent you from doing the tasks that you were able to do before the crash, but not after. These are also available for the 1st 3 years following a crash.
• Attendant Care (home nursing services provided by either friends, family, or an agency)
• Medical Mileage (reimbursement for mileage incurred while travelling back and forth to your medical providers)
• 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, a fence on Grand River, 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

This is where “Fault” comes into play in the Michigan No-Fault scheme. 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 and not recommended. We believe it’s smart to purchase higher limits to protect yourself in the event of a serious accident. For instance, if you blew through a red light at 12 Mile and Orchard Lake Road, and the other party’s losses exceed your liability coverage, they could sue you personally for the remaining amounts. If you chose to lower your coverage to $50,000 and an Oakland County jury entered a verdict against you for hundreds of thousands of dollars, you could be ruined financially. In our opinion, the more residual liability coverage, the better.

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.
• PIP insurance also does not cover pain and suffering damages. Compensation for pain and suffering 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 that 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 Farmington Hills and metro Detroit neighbors deserve. We will 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, Macomb County, Wayne County, Oakland County, and all of Michigan.

About the Author
Neil Davis, owner of Davis Law Center, is a seasoned attorney specializing in personal injury cases. With over 30 years of experience, he has successfully secured millions in compensation for injured individuals. Neil is a dedicated advocate for justice and an active member of legal associations. Neil has also been recognized as a Top 100 Trial Lawyer by The National Trial Lawyers and is a life member in The Top Trial Lawyers In America Million Dollar Advocates Forum.

Personal injury law is complex and best handled by a competent attorney who can effectively evaluate, prepare, present, and fight to win your case. Neil prides himself on doing all of these things for his clients and would be honored to discuss your case with you.  Contact us today.