Michigan has a no fault insurance law requiring that everyone who drives must purchase certain types of insurance in order to get plates. You cannot drive your car, nor can you let anyone else drive your car without this type of policy.
No-fault insurance pays for your injuries and lost wages, and damage you cause to other people’s property, without regard to who is at fault for the accident. However, it does not pay for damage done to your vehicle. A no fault policy has at least three parts: Personal injury, often referred to as PIP, property protection, often referred to as PPI, and residual liability insurance for property damage and bodily injury.
The Three Parts of No Fault Insurance
Personal Injury Protection (PIP)
By law, personal injury protection pays all of your medical expenses for injuries you sustain in an accident, as long as the medical expenses are reasonably necessary. It does not have a maximum limit. It also pays up to 85 percent of lost wages if you miss work due to your injuries. The amount for lost wages is limited and is revised each year. As of October 1, 2018, the limit is $5,700 per month for as long as three years, depending on what you would have earned. You will also receive up to $20 each day for routine household services that you are not able to perform because of your injuries. This includes yard work and housekeeping.
Property Protection (PPI)
If you damage someone’s property in a car accident, the property protection component of your no-fault insurance policy will pay up to $1 million for damage you do to fences, buildings, another person’s parked vehicle, and other property. It does not cover other damage to cars involved in an accident.
Residual Liability Insurance
This portion of no fault insurance covers your liability for injury or losses you cause to others in an auto accident. People sometimes find this a little confusing because, because “no-fault” insurance is supposed to cover everyone regardless of fault. That’s true, but you could still have legal liability to someone if:
- The accident you cause kills someone, seriously injures someone or causes permanent disfigurement;
- You are involved in an accident with someone who is not a resident of Michigan if the vehicle that person is riding in is not registered in Michigan;
- You get into an accident in another state; or
- If you are more than 50 percent responsible for the accident, you may be sued for up to $1,000 for damages to another person’s uninsured vehicle.
What the Minimum Coverage Pays
With no fault insurance, you are able to purchase coverage with higher limits. The minimum coverage pays out up to:
- $50,000 for someone who is killed or hurt in an accident;
- $100,000 for each accident if more than one person is killed or hurt; and
- $10,000 if you damage property in another state.
If you are sued for more than these payouts, the insurance pays these amounts and you are responsible for the rest. Many people purchase additional coverage to better protect themselves. Likewise, if you are injured in an accident that is not your fault, you can sue the at-fault driver for more than the minimums if the injuries qualify under the rule for residual liability insurance.
Additional Insurance
To protect yourself, you can purchase additional insurance, including collision and comprehensive insurance, limited property damage liability insurance, and towing and car rental coverage.
Collision and Comprehensive Insurance
If you want your vehicle covered for damages, you will need to purchase collision and comprehensive insurance. The collision portion of the insurance pays for repairs if your vehicle is damaged in a wreck. The three types of collision insurance available are limited, standard, and broad. The lower the deductible, the higher the premium. However, you do have to pay the deductible, so choose a deductible that you are comfortable paying.
Comprehensive insurance pays for damage to your vehicle if you hit an animal, if a falling object damages your vehicle, or vandals, fire or a flood damage your vehicle. If your car is financed, you may be required to purchase collision and comprehensive insurance.
Limited Property Damage Liability Insurance
This insurance is often referred to as mini-tort insurance. This insurance is additional coverage for the residual liability insurance portion of no fault insurance.
Towing and Rental Car Coverage
This coverage is optional and is available through most insurance companies. It will cover or reimburse you for the cost of a rental car or towing for breakdowns, accidents, flat tires, etc.
What This Means if You Are Not at Fault
Many people will only opt for minimum coverage. But, if you want to ensure you are covered in the event of an accident where you are not at fault or are partially at fault, you should have the maximum coverage available, including collision and comprehensive insurance since your own insurance covers you even when someone else causes the accident.
You should also contact a car accident lawyer after an accident. Your insurance company will try to pay the least amount possible. After all, they are in business to make money. A car accident lawyer will negotiate with your insurance company to get you fair compensation if you are involved in an accident. And, if the insurance company does not offer you fair and reasonable compensation, the car accident lawyer can advise you on your options for taking legal action.
A car accident attorney can also advise whether you have rights to recover compensation from the at-fault driver if the at-fault driver killed a family member in the accident, caused permanent damage to you or caused serious injury. You should never assume that your injuries are not serious and that you won’t be able to sue the at-fault driver. Let a car accident lawyer help you make that determination so that you are able to get the compensation you are entitled to for injuries, especially if the injuries may require additional therapy or surgeries.
