Michigan no-fault insurance has sometimes been described as "making a deal with the devil."

No-fault Insurance is required by law in Michigan. Every car owner must purchase basic coverage in order to license a car. If you are a resident of Michigan, it is against the law to drive or let your car be driven without no-fault insurance. The minimum amount of insurance required by Michigan law is:

● Up to $20,000 per person who is hurt or killed in an accident;
● Up to $40,000 per accident if several people are hurt or killed
● Up to $10,000 for property damage caused by your vehicle in another state.

This basic coverage is often referred to as 20/40/10. Basic no-fault insurance pays for your medical and wage loss, and damage your vehicle causes to other people’s property. It does not matter who caused the accident. Basic no-fault insurance does NOT pay for repairs to your car; you must purchase additional collision coverage for this.

The basic no-fault policy has three parts:

1. Personal Injury Protection (PIP)

If you are injured in an auto accident, this part of your no-fault policy will pay all of your medical costs. There is no limit to the amount of medical expense your policy will pay. It will also pay 85% of lost income for up to three years if you are unable to work due to injuries from an automobile accident. The amount you receive will be based on your earnings prior to the accident. Wage loss is capped at a maximum monthly amount and this cap is revised annually. As of 10/1/2009, the maximum monthly payment is $4,878 per month. If you are killed in an accident, your wage loss benefit will be paid to your family for three years. You are also entitled to $20 per day in replacement services such as housekeeping and yard work that you are no longer able to do yourself.

2. Property Protection

No-fault will pay up to $1 million for damage your car causes in Michigan to property owned by others such as buildings and fences. It will also pay for damage your vehicle causes to properly parked vehicles. It does not pay for any other damage to vehicles.

3. Residual Liability Insurance - Bodily Injury and Property Damage

The no-fault law protects insured persons from being sued except for certain situations. In general, you can only be sued:
● if you cause an accident in Michigan in which someone is killed, seriously injured, or permanently disfigured;
● if you are in an accident in Michigan with a non-resident who is an occupant of a motor vehicle registered in another state;
● if you are involved in an accident in another state; or
● for up to $500 if you are 50% or more at fault in an accident which causes damages to another person’s car which are not covered by insurance. This is referred to as “mini tort” and is often used to reimburse the other party for their collision deductible.

Your no-fault policy covers the whole family. A no-fault policy covers all family members living in the same house. PIP benefits will be paid even when a family member is a passenger in another person’s car or is a pedestrian. PIP coverage also covers passengers or pedestrians that are injured in an accident involving your car if they do not have their own no-fault policy. It will also cover motorcyclists who are injured in accidents involving your car.

This is a brief summary of no-fault insurance and does not cover all details. You should always contact your local insurance agent for a full explanation of your policy. If you have been injured in an automobile accident where no-fault insurance is involved, contact an experienced no-fault lawyer and ask them for a free evaluation of your potential personal injury claim.

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