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How does no-fault insurance in Michigan work?

Self-Driving Cars to Change No-Fault Insurance in Michigan

March 8, 2019

Driverless cars are no longer the works of science fiction. We already have vehicles with autonomous modes that can operate without a human driver. Motorists use automated systems to prevent rear-end collisions, keep vehicles in their lanes and “see” vehicles in their blind spots. Technology we could have never imagined decades before will change every aspect of the transportation world today. Furthermore, experts believe many of these changes will impact the way no-fault insurance in Michigan works.

How Does No-Fault Insurance Work in Michigan?

Before considering the effects of driverless technology, let’s look at the current no-fault insurance system in Michigan.

First, all Michigan drivers are required to purchase a no-fault policy that includes Personal Injury Protection (PIP) coverage. These benefits pay lifetime medical expenses,  including attendant care and medical mileage for individuals injured in an auto accident.  PIP Coverage also includes three years of wage loss and,  up to $20 per day for replacement services, such as household help.  When an accident results in death, the no-fault carrier is responsible for funeral expenses and may be responsible for survivor’s loss benefits  to surviving family members.

The policies of no-fault insurance in Michigan also include Personal Property Protection (PPI) benefits. These benefits typically pay up to $1,000,000 for damage to other people’s property or legally parked vehicles.

In addition, there are third-party benefits that include non-economic losses, such as pain and suffering. These benefits are usually paid by the at-fault driver or their insurance company. Third-party benefits also cover costs for bodily injury, including death, as well as property damage. 

While the payment of these PIP benefits may come from the injured party’s own no-fault carrier, the no-fault laws provide an order of priority that addresses which insurance company is responsible.

The Effect of Driverless Vehicles on No-Fault Insurance in Michigan

The emergence of autonomous vehicles will dramatically change the way no-fault insurance in Michigan works. One of the major issues will be determining who is at fault when a driverless car causes an accident. Is the manufacturer of the vehicle responsible? The software developers or who licences the vehicle?

Here are other concerns about how driverless technology will affect no-fault insurance in Michigan:

  • Premiums are based, in part, on the likelihood of a driver being involved in a crash. And, human error causes the majority of car accidents. Therefore, removing the driver will significantly change the current insurance system. 
  • If an autonomous vehicle owner fails to get the latest software update, who is liable when an accident occurs? The owner? The software company?
  • Who is at fault if a vehicle’s LiDAR (a detection system similar to radar that uses laser light to locate people and objects around the vehicle) fails? The car manufacturer? The LiDAR supplier?
  • If a car with automatic steering or cruise control loses its internet connection and crashes, who pays? The internet provider? The automobile company?
  • Who pays for the damages if a computer-controlled vehicle is hacked and stolen?
  • Some autonomous vehicles have trouble recognizing people and certain objects. They are also somewhat inaccurate at predicting how other drivers will behave. This means driverless cars may have a greater risk of hitting a pedestrian or another vehicle. When this happens, who is responsible?
  • The technology used for autonomous safety features is costly to repair if the car is damaged in a crash. As more drivers purchase these vehicles, insurance premiums are likely to rise, at least initially.
  • Insurance premiums are based on driver-related factors such as age, gender and driving record. Autonomous vehicles will allow insurers to gather car-related data, which will change the current rating and pricing systems.

“No-fault insurance in Michigan has a complex set of rules, regulations and exceptions,” said Mark Bernstein of The Sam Bernstein Law Firm. “As we see more driverless vehicles on our roadways, the insurance system will become even more confusing and difficult to navigate. That is why you should call us immediately if you or a loved one is injured in an accident involving any kind of motor vehicle. Our experienced attorneys will make sure you receive the compensation you and your family deserve.”

Michigan no-fault law is complicated, but finding the right lawyer is simple.

Call 1-800-CALL-SAM today for a free no-obligation consultation.

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