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Michigan No-Fault Laws and Most Common Questions Answered

A woman standing outside her car, speaking on her phone with a distressed expression, in front of two vehicles that appear to have been involved in a minor collision.
A woman standing outside her car, speaking on her phone with a distressed expression, in front of two vehicles that appear to have been involved in a minor collision.
  • Key Takeaways:Michigan is a no-fault state, meaning your insurance company will pay for your damages after a car accident.
  • A reform to the Michigan no-fault laws was signed in 2019 and took effect on July 1, 2020.
  • The reform also affects how much compensation you must carry under your personal injury protection insurance.
  • No-fault insurance covers medical care, lost wages, nursing care, damages to other people’s property, and more.
  • Securing compensation for non-economic damages, like pain and suffering, can be difficult in Michigan, which is why we suggest hiring a lawyer immediately after an accident.

 

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.

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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.

Confused about your insurance after an accident? Call us for a free consultation.

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?

Aerial view of Grand Rapids, Michigan at dusk, with the city's buildings and bridges illuminated and the river flowing through the city center.

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.

Were you in a complex accident? Call us for FREE to learn your options.

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

 

Frequently Asked Questions

Does Medicaid Pay for Auto Accident Injuries in Michigan?

Yes, Medicaid can pay for injuries sustained in a Michigan car accident under the reformed no-fault law. Have an updated Medicaid card handy to show proof of enrollment.

What is Qualified Health Coverage in Michigan?

Qualified health coverage refers to either Medicare Parts A and B or a health and accident policy that covers auto accident injuries with an annual deductible of $6,000 or less.

What is the Recommended Bodily Injury Coverage in Michigan?

We recommend Michigan drivers have bodily injury liability insurance with coverage limits of $500,000 and $1,000,000.

What Does Bodily Injury Cover in Michigan?
  • Bodily injury liability coverage helps pay for the following:Medical expenses of others injured in a car accident you cause (not including your own injuries)
  • Financial assistance for legal defense in the case of a lawsuit arising from the accident

 

Can I Get Benefits if Auto Accident Makes an Old Injury Worse?

Yes, but you have to prove to your auto insurance company that the accident, as opposed to the pre-existing injury, is what is causing your need for treatment and any disability you claim. In other words, you have to be able to show that this accident aggravated your pre-existing injury.

Can an Illegal Alien Receive Michigan No-Fault Benefits?

Yes, it’s possible if the person resides with a relative with auto insurance (or if the “undocumented” person has obtained their own auto insurance). In Michigan, anyone injured in a car accident is eligible for no-fault benefits, regardless of their legal status in the U.S., as long as they are not in an uninsured vehicle they own.

Does an Injury Need to be Permanent to Qualify for Compensation?
  1. “Do I have to have a permanent injury to qualify for monetary damages against the other driver in a Michigan no-fault case?” This is a question we answer in one form or another just about every day in our practice. In a Michigan motor vehicle crash case, you may qualify for monetary damages against the owner, driver, or both of the other vehicles if:The other driver was at least 50% responsible for the collision
  2. You had no-fault coverage on your vehicle (if you were a pedestrian or bicyclist, that doesn’t apply)
  3. You suffered a serious impairment of body function, permanent serious disfigurement, serious neurological injury, or death

 

How Much Compensation Can I Receive?
  • As mentioned, under the new no-fault policy law, you are required to carry personal injury protection up to certain coverage amounts. These coverage limits indicate how much reimbursement you receive after a crash. Your coverage options include:Unlimited coverage
  • $500,000 per person, per accident
  • $250,000 per person, per accident
  • $250,000 per person, per accident, with exclusions

For the final choice, the exclusions include named insured people who choose to use their own health coverage, that is not Medicare, to cover their injuries and any family member who chooses to exclude the coverage and has good health insurance in place. This reform mandates that PIP insurance covers specific property damages. No-fault insurance covers up to $1 million for damage your car causes to others’ property, including buildings, fences, and parked vehicles. However, it does not apply to damages to other cars involved in the crash.

Can I Get No-Fault Benefits if I am Injured While Working on My Car?

Yes, Michigan’s no-fault law says that PIP benefits are available for injuries that occur during vehicle maintenance. The vehicle doesn’t need to be in motion to bring this provision into effect. For example, in one case, a man had his car up on a jack so that he could replace his shock absorbers. It slipped off the jack and landed on him. At first, the car insurance did not want to pay his medical expenses, claiming that the car wasn’t running or even being used as a motor vehicle at the time, meaning that no-fault benefits should be denied. The appeals court clarified that the no-fault law covers injuries sustained during vehicle maintenance, such as replacing shock absorbers, so the injured man got his benefits.

Can a Motorcyclist Receive Coverage After Being Hit by an Uninsured Driver?

It’s possible. This would happen if you had valid liability coverage on your motorcycle and were struck by a vehicle (a car or truck, not another motorcycle) that DID NOT have insurance. In that specific case, you could apply for insurance through a car or truck that you owned and insured (or that was owned and insured by someone else who let you drive their motorcycle), even though your car or truck was not involved in the accident. This rule applies no matter who was at fault as long as you can prove that a “motor vehicle” (not a motorcycle) was involved in the collision with you. It also applies to your motorcycle passenger, if any.

Can I Get Michigan No-Fault Benefits if I am in Car Accident in Another State?

If you have Michigan no-fault benefits yourself or through a resident relative’s policy, that coverage “follows” you to any state, U.S. territory, or Canada. This means that you qualify for medical benefits, wage loss, and the same “first-party” coverage you would have had in an accident in Michigan. This is true even if your vehicle was not involved in the out-of-state accident. For example, if you went to another state for a vacation and were injured while riding a bus, you could still qualify for Michigan no-fault benefits as long as you were covered by a Michigan policy at the time. This is especially helpful to remember if you have children who are away at school in other states. As long as they are covered by your policy here in Michigan, they are eligible for no-fault coverage if they get hurt in a motor vehicle accident in another state.

Do I Need a Lawyer to Start No-Fault Benefits?

No. You can start your no-fault claim on your own. If you are hurt in a motor vehicle accident, you can contact your insurance company and set up your claim for medical, wage loss, and other no-fault benefits without a lawyer. In fact, attorneys must explain that you can apply for benefits without legal representation. However, many people find that the no-fault system is difficult to understand and to work their way through. Others find very quickly that the information the insurance company wants before it will start paying seems unreasonable or overwhelming. People worry that they may say the wrong thing, so hiring an attorney can resolve such anxiety about your claim. For pain and suffering, we advise you not to directly negotiate with the other driver’s insurance company without first hiring a lawyer, as this is a separate matter from your case against the other driver.

Will Replacement Services Benefits Cover My Cost to Hire Someone to Do My Job if Hurt in an Accident?

Not likely. Under Michigan’s no-fault insurance, replacement services benefits provide up to $20/day to help pay others for activities you would have done yourself if you hadn’t been hurt in an accident. These benefits only apply to activities that do not produce income. You usually will need a doctor’s prescription to support your claim, and your insurance company will also usually want to see your medical records to help prove that you can’t do your customary household duties.