Michigan No-Fault Laws and Most Common Questions Answered

Getting into a multiple-person car accident can be a troubling time. You may not know how to approach the insurance company after a car accident. Fortunately, the at-fault laws in Michigan seek to help victims of car accidents. Matz Injury Law is here to help you deal with car insurance companies. Call us at 1-866-22Not33 or use our contact page to get help with your claim.

What Does It Mean for Michigan to Be a No-Fault State?

When you are involved in an auto accident, you need to understand the options you have to get compensation for that crash. In the state of Michigan, laws favor injured parties by making it easy for most people to get compensation for their injuries, regardless of who is at fault for the accident. This policy protects against uninsured drivers or unnecessary delays in determining who is at fault.

Michigan’s car accident laws are considered no-fault laws. As a no-fault state, Michigan requires its drivers to have insurance to cover their own injuries and damages in a car crash, regardless of who the at-fault driver is.

Michigan no-fault laws apply to car accidents, not other types of accident claims. Because of this law, you must carry personal injury protection insurance or PIP. If you crash, you turn your damages into your insurance company, which will pay for your injuries and any damages you have caused to others’ property.

While this may seem backward because your insurance pays for damages you did not cause in an auto accident, it actually provides quite a bit of protection. It also means you get even more for the premiums you pay for your Michigan auto insurance policy because it may eventually pay for your injuries in a crash, even if you are the at-fault driver.

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Michigan No-Fault Insurance Priority List

The system is called a “priority” list that works like a ladder, starting at the top rung and moving downward. Here is the priority system if you were in a motor vehicle (not including a motorcycle) when you were injured in a collision — even a one-car incident or one where you were driving but were at fault:

• Highest priority: your own car insurance, even if you were a passenger; if you didn’t have car insurance and were in your car when a crash occurred, you are disqualified from the no-fault system and can’t get any of the benefits discussed above;
• Second priority: the auto insurance in force on the date of the accident that applies to any relative you live with; it doesn’t matter whether you are listed on the policy. The no-fault coverage applies to any relative in your household who doesn’t have their own auto insurance;
• Third priority: the auto insurance covering the owner of the vehicle you were in (if that’s not you or a resident relative);
• Fourth priority: the auto insurance covering the driver of the vehicle you were in (if that’s not the person in one of the first three priorities);
• Fifth priority: Michigan Assigned Claims Plan: Michigan will appoint an insurance company to provide your no-fault benefits if none of the first four priorities have insurance, so long as you were not occupying an uninsured vehicle you owned.

The good news is that you will qualify for no-fault coverage for medical, wage reimbursement, medical mileage, household chore assistance, and attendant care (family member assisting a seriously injured person) if you were in a motor vehicle and got hurt by a collision, whether you were a passenger or the driver, without regard to who caused the collision.

The bad news is that you cannot get no-fault coverage if you were in your own uninsured vehicle when the collision happened.

Please keep in mind that “qualifying” for benefits is just the first step. There are procedures that you must follow to satisfy the insurance company that you are entitled to the benefits. These procedures must be followed and kept current in order for you to receive the benefits that may be due to you.

Also, remember that the rules for motorcyclists are different from those of other drivers.

What is the Difference Between No-Fault and Fault States?

How do at-fault and no-fault states differ when a car crash occurs? In a no-fault state like Michigan, your insurance coverage will cover your own injuries and medical bills under a personal injury protection policy. The no-fault state laws make this insurance coverage a requirement to drive in the state.

In contrast, in at-fault states, the driver responsible for an accident due to negligence or impairment covers the medical costs. Compensation for the injured party may be delayed until fault is legally established, with some states assigning a portion of medical costs based on shared fault in the accident.

Why Does Michigan Have No-Fault Insurance?

Question

Why do some states like Michigan have “no-fault” auto insurance while others don’t?

Answer

In the past, Michigan had a tort liability system for car accidents. This system required drivers to carry liability insurance. If they were in an accident that caused injuries to others, their insurance would pay if they were at fault.

Michigan’s 2020 No-Fault Law Reform

Michigan’s no-fault insurance law was unique among the states. It used to require drivers to purchase unlimited lifetime coverage for medical expenses from motor vehicle accidents through the Michigan Catastrophic Claims Association (MCCA).

In 2020, the reform was enacted for Michigan’s no-fault laws. The legislature recognized that having PIP benefits on someone’s own insurance helps injured parties get medical coverage as quickly as possible. This new auto insurance law eliminated the fault system and flipped the responsibility around, also eliminating the requirement to buy coverage through the MCCA.

With this insurance reform, Michigan became a no-fault state because lawmakers found that the tort liability system was hurting motorists and accident victims. Under the new law, these medical expenses are the responsibility of your insurance provider, even if the other driver was fully at fault.

Other Changes to Michigan’s No-Fault Insurance Laws

On May 30, 2019, Governor Whitmer signed a law reforming no-fault auto insurance. This law aims to lower insurance costs for Michigan drivers, provide a range of insurance coverage choices, and enhance protections for consumers. Yet, there are some stipulations to note:

• Effective date: The modifications to Michigan’s no-fault auto insurance law will not affect people who were injured before the new legislation.
• Bodily injury liability insurance: Drivers must have bodily injury liability insurance covering at least $250,000 per person, $500,000 per accident, and $10,000 for property damage. However, the law allows drivers to opt for lower limits of $50,000 and $100,000.
• PIP insurance: Under the new law, drivers can now choose between continuing with “unlimited” PIP medical benefits or selecting capped coverage at $50,000 (for Medicaid enrollees), $250,000, or $500,000. Previously, the law mandated “unlimited” coverage for all car accident-related medical care.
• Attendant care: Attendant or nursing care provided by an employee’s spouse, brother, sister, child, or parent is limited to a maximum of 56 hours per week.
• Medical coverage opt-out: After July 1, 2020, drivers on Medicare can opt out of PIP medical benefits coverage, with the expectation that they will use Medicare for medical coverage in case of injuries from a car accident.

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What Are the Benefits of No-Fault Insurance?

When you are in a no-fault insurance state like Michigan, you do not have to worry about the cost of any bodily injury you sustain in a car crash. Your insurance company will step in and cover these costs up to the limits of your policy’s coverage. These coverage benefits include:

• Medical expenses: Medical bills, hospital bills, and the cost of ongoing health care treatments and medications after your initial visit to the doctor are all part of this coverage.
• Damage to others’ property: You are liable for any damage you cause to another person’s property; your insurance will cover this.
• Lost wages: Wage loss can add up quickly after a motor vehicle accident, and your PIP coverage will pay a percentage of your lost wages.
• Child care coverage: If you need to pay someone to care for your children while dealing with the aftermath of the accident, the new law requires your insurance company to pay for this.
• Household modifications: If your injuries require you to use a wheelchair or a walker, you may not get enough help through your health insurance, Medicaid, or Medicare to pay to modify your house, but this law requires your insurance to cover the modifications to your house you might need to live there safely.
• Nursing care: Michigan’s no-fault insurance law requires your insurance provider to pay for attendant care if you need long-term care after the crash.

Why Choose Matz Injury Law

We are compassionate auto injury and personal injury lawyers with years of experience helping Michigan accident victims. We know how to work with PIP auto insurance companies to help injured individuals and their families fight for fair compensation after a crash.

Our passion is to help injured individuals get their full PIP benefits and any other compensation they deserve after a crash. We want to help you get back on your feet so you can enjoy life once again. We understand the unique no-fault laws in Michigan and can help you navigate working with insurance companies or seeking help for complex accidents that have many parties present. We have won over $300 million for our clients to date.

If you or a family member have been injured in a car accident and need knowledgeable representation and a thorough explanation of the no-fault insurance laws in Michigan, call our law firm today at 1-866-22Not33 or use our contact page today. We are eager to guide you through your auto accident case.

Recent Auto Accident Settlements from Matz Injury Law

• $4.15 Million Settlement in Washtenaw County
  • $4,150,000 settlement on behalf of the family of a college student who was killed in a traffic crash while riding a motorcycle. The settlement came from three different insurance companies.
    • The client kept an additional $470,195 with Matz Injury Law’s “22, not 33” promise.
• $3.45 Million Settlement In Genesee County
  • $3.45 million settlement against a cement company whose truck crossed a center line, causing three deaths and severely injuring a 4-year-old boy. The settlement was $450,000 in excess of available insurance.
    • The client kept an additional $470,195 with Matz Injury Law’s “22, not 33” promise.
• $1.74 Million Settlement Awarded In Calhoun County Collision
  • $1.74 million settlement against a 19-year-old driver and the fraternity where he was drinking immediately prior to a head-on collision that killed a 52-year-old husband and father of 3 children.
    • The client kept an additional $470,195 with Matz Injury Law’s “22, not 33” promise.
• $1.3 Million Settlement In Monroe County
  • $1.3 million Federal District Court settlement on behalf of a mother and daughter in a car/truck collision.
    • The client kept an additional $470,195 with Matz Injury Law’s “22, not 33” promise.

Related Article: Championing a Lower Attorney Contingency Fee

Additional Resources

• How PIP Works With Medicare: In this blog, we discuss whether you can opt out of PIP insurance if you have Medicare.
• Michigan Mini Tort Laws: This article introduces mini torts in Michigan and how they affect your case.
• Michigan’s Pain and Suffering Laws: Securing compensation for pain and suffering can be difficult without a lawyer. Learn more!
• Michigan Personal Injury Protection (PIP) Guide: Learn how PIP insurance works in Michigan.
• Understanding Fault in Multi-Vehicle Auto Accidents: Are you not exactly sure who caused your car accident? Read our guide on handling lawsuits in multi-vehicle collisions.
• Michigan Independent Medical Examinations (IME): You may be asked to complete a medical examination. Here’s a guide on how to handle them.