There are 3 basic principles to Michigan No Fault Auto Insurance Policies.
We will discuss each part of Michigan No Fault Auto Insurance Law in detail below:
Personal Injury Protection (PIP)
In Michigan, the “no fault” portion of your insurance pays for all your medical costs incurred due to an accident. In addition to that, Personal Injury Protection will also pay up to 85% of the income you would have earned if you had not been hurt, for up to three years. However, the amount that you would be paid for lost income is limited and the limit is revised annually.
Effective 10/1/15, the maximum is $5,398 per month. If you are killed in an accident, your policy will pay your family up to $5,398 per month for three years, depending upon what they would have received from your earnings and fringe benefits. In addition, you are entitled to “up to” $20 per day in replacement services. This is to pay for routine household services which injured persons are no longer able to provide for themselves or their families, such as housekeeping and yard work.
2. Property Protection (PPI)
No-fault will pay up to $1 million for damage your car does in Michigan to other people’s property, such as buildings, fences or utility poles. If you hit a properly parked car, Michigan No Fault insurance will also cover that damage. It does not pay for any other damage to cars, yours or anyone else’s, that would be covered by optional collision insurance.
3. Residual Liability Insurance – Bodily Injury and Property Damage
In Michigan, you can not be sued as a result of an auto accident except in the following instances:
(a) if you cause an accident in Michigan in which someone is killed, seriously injured, or permanently disfigured;
(b) if you are involved in an accident in Michigan with a non-resident who is an occupant of a motor vehicle not registered in Michigan;
(c) if you are involved in an accident in another state; or
(d) for up to $1,000 if you are 50% or more at fault in an accident which causes damages to another person’s car which are not covered by insurance. Your required minimum coverage no-fault policy will pay up to certain amounts if you are found legally responsible. Although you may purchase additional coverage with higher limits, the minimum coverage offers:
Up to $20,000 for a person who is hurt or killed in an accident,
Up to $40,000 for each accident if several people are hurt or killed.
Up to $10,000 for property damage in another state.
You may be sued because of an accident, as was discussed in the section on residual liability insurance. If this happens, your Michigan no fault auto insurance policy will pay up to the amounts shown in the residual liability section. However, courts sometimes award more than these amounts. If this happens, you would be responsible for paying the amount not covered by your insurance policy, this is where it would be smart to have an Umbrella Insurance policy. To protect themselves, many people buy higher limits of liability insurance.
Coverage Requirements in Michigan
|Coverage||Required Coverage In Michigan||Typical Coverage Levels|
|Bodily Injury Liability|
Covers expenses related to the injury or death of another driver or a pedestrian when an accident is your fault.
|$20,000 limit per person/$40,000 limit per accident||$100,000 limit per person/$300,000 limit per accident|
|Property Damage Liability|
Covers expenses related to the damage of another person's property—like vehicles, homes, buildings and other structures—when an accident is your fault.
|$10,000 limit||$100,000 limit|
|Personal Injury Protection|
If you and/or your passengers are hurt in an accident, this can cover your medical bills plus related expenses like income continuation.
|Unlimited on medical, primary or excess by plan||Common coverage varies on individual health insurance coverage amounts|
(Limited, Broad & Standard)
Covers expenses to repair or replace your vehicle that's been damaged in an accident.
|Not required||$500 deductible with broad form insurance|
Covers expenses to repair or replace your vehicle that's been damaged in situations like thefts or storms.
|Not required||$100 deductible|
Covers expenses related to the damage of buildings, parked vehicles and other stationary structures.
|$1,000,000 limit||$1,000,000 limit|