Anselmi Mierzejewski Ruth & Sowle P.C. | A-M Law | Attorneys | Counselors

Anselmi Mierzejewski Ruth & Sowle P.C.

Insurance Defense Counsel In Jurisdictions Throughout Michigan

What does it mean to have no-fault insurance in Michigan?

On Behalf of | May 25, 2023 | Vehicle Accident Defense

Residents of Michigan should understand a key aspect of the State’s auto insurance law: no-fault insurance. This unique system has a significant impact on how auto accident claims are handled and how compensation is sought.

In a no-fault insurance system like Michigan’s, your own insurance company pays for your medical expenses, wage loss benefits, replacement services and damage to other people’s property, regardless of who was at fault in an auto accident. The aim of this system is to streamline the claims process, reduce rates of litigation and guarantee timely payment for injuries.

3 components of no-fault insurance

No-fault insurance comes with three main parts: Personal Injury Protection (PIP), Property Protection (PPI), and Residual Bodily Injury and Property Damage Liability Insurance.

  • Personal Injury Protection (PIP) covers all necessary medical costs if you’re injured in an auto accident. It also provides up to 85% of the income you would have earned if you hadn’t been hurt. There’s a three-year limit for income replacement. You may also receive up to $20 per day for replacement services like housekeeping that you’re unable to perform because of your injuries.
  • Property Protection (PPI) pays up to $1 million for damage your car does to other people’s property in Michigan. For instance, if you hit a fence or building, PPI will cover the damages.
  • Residual Bodily Injury and Property Damage Liability Insurance pays if you’re found legally responsible for an auto accident that caused serious injury, death, or significant property damage. It protects you from being sued as a result of such accidents.

While this system generally prevents lawsuits between drivers, there are some exceptions. In Michigan, you could be sued if you cause an accident in which someone is seriously injured or killed, or if you’re involved in an accident with a non-resident who is driving a vehicle that is not registered in Michigan. You could also face a lawsuit if you’re involved in an auto accident in a state that doesn’t have a no-fault insurance system.

As of the latest updates in Michigan’s no-fault insurance laws, drivers now have the option to choose their level of PIP coverage. You may choose from several coverage levels, or even opt out entirely if you have other qualifying health coverage. This choice allows you to potentially reduce your auto insurance costs.

Understanding no-fault insurance in Michigan is crucial to navigating any potential claims and understanding your coverage. Remember that each case can have its unique aspects, so it’s always a good idea to learn about the coverage that applies in a specific case and to seek legal guidance whenever necessary.