Understanding Michigan No-Fault Insurance
July 12, 2018
The Michigan no-fault insurance law was enacted in 1973 to help people who were injured in motor vehicle accidents recover damages without the cumbersome and often costly process of determining who was at fault.
Only 12 states plus Puerto Rico have no-fault auto insurance laws. Michigan is currently the only state in the country with unlimited lifetime medical benefits without the monetary cap that exists in other states.
While no-fault insurance has significant advantages over the previous tort liability system, it is still a complex law with many intricacies. Therefore, it is helpful to have a basic understanding of the no-fault insurance system before you need to use it.
No-Fault In a Nutshell
In its simplest explanation, no-fault insurance is insurance that pays for your economic losses in the case of an accident, regardless of who is at fault.
Items paid by a driver’s basic no-fault insurance, known as first-party benefits or Personal Injury Protection (PIP) and Property Protection Insurance (PPI) benefits, include:
- Lost wages
- Medical bills
- Survivor benefits
- Home care or other assistance necessitated by your injuries
- Replacement services such as household chores or yard work
- Mileage for doctor visits or therapy appointments
- Damage caused to parked vehicles or property owned by others
It’s worth noting that basic no-fault insurance does not cover repairs to your own car.
Indirect losses such as damages for pain and suffering are considered third-party benefits. These claims are usually paid for by the insurance company of the driver or owner of the vehicle that caused the accident. Third-party benefits also include bodily injury—including death, serious impairment of bodily functioning or permanent disfigurement.
If you are at least 50% at fault in an accident that damages another person’s uninsured vehicle, property damage third-party benefits cover up to a maximum of $1,000.
Who Is Covered By No-Fault Insurance?
Every person living in the same household as the policy owner is covered under no-fault insurance. If one of those people is injured while walking or riding in a non-household member’s car, PIP benefits will still apply. This holds true for any passenger who is hurt while riding in the insured vehicle, providing that person does not have their own no-fault insurance policy.
“Michigan no-fault insurance law is complex, and, when an accident occurs, figuring out the particulars of your policy is the last thing on your mind,” says Mark Bernstein of The Sam Bernstein Law Firm. “This is why you should call an experienced accident attorney immediately—before signing any documents—if you or a family member is injured in a crash.”
No-Fault Insurance Rules For Motorcycles
Because motorcycles are not considered motor vehicles under Michigan no-fault law, the no-fault insurance coverage is different than policies for cars, trucks and other passenger vehicles. The PIP coverage that pays medical bills and associated costs are not included in standard motorcycle insurance. Instead, it is limited to liability coverage for property damage and bodily injury only.
When a motorcyclist is injured in an accident involving another motor vehicle, compensation for injuries or damages will usually come from the insurance company that covers the vehicle’s owner. Insurance benefits apply whether the injured party is the driver of the motorcycle or a passenger.
If no other motor vehicle is involved, such as a motorcycle-deer accident or a collision with another motorcycle, no-fault benefits do not apply. Therefore, it is recommended that motorcyclists purchase optional motorcycle PIP coverage, which Michigan insurance companies are required to offer by law.
The Clock is Ticking…
Accident victims have one year to file a lawsuit for no-fault first-party benefits and three years from the date of the accident to make a claim for third-party benefits. However, it is to the victim’s advantage to take action as quickly as possible while evidence and witness recollections are still fresh.
Some exceptions do exist for minors (who can file a claim up to one year after they turn 18), individuals with mental or cognitive impairment, military personnel and survivors of a person who was killed in an accident.
No-fault insurance law is complicated, but finding the right accident attorney is simple. If you or a loved one has been injured in a motor vehicle or motorcycle accident, call us immediately. Our experienced accident lawyers know the ins and outs of no-fault law, and we will make sure you and your family receive the compensation you deserve.
Call 1-800-CALL-SAM today for a free, no-obligation consultation.