Michigan No Fault Insurance [Quick Guide]

In order to drive lawfully in Michigan, you must acquire no-fault vehicle insurance. One of the most compelling reasons to get insurance is the financial stability that comes with it. Injuries might cost you or your family hundreds of thousands of dollars in the event of a major accident.

It is illegal to drive without insurance. It is a misdemeanor punishable by a fine of up to $500 and up to one year in prison. Your license may also be suspended for 30 days or until you can show proof of proper insurance, whichever comes first.

This is just a quick overview of no-fault insurance. Read your policy, talk to your agent, and/or contact the Department of Insurance and Financial Services for further information (DIFS).

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There are three parts to the basic auto insurance policy that you must purchase:

1. Personal Injury Insurance (PIP).

If you are injured in an automobile accident, Personal Injury Protection (PIP) will cover all reasonable and necessary medical expenditures for the rest of your life, up to the maximum coverage level set in the affected policy. For up to three years following the injury, PIP will cover salary loss and replacement services. Additional restrictions apply to the quantity of attendant care, which is care provided in your home to assist you with everyday tasks while you recover from an injury.

The following are the PIP coverage options:

• $250,000 per person per accident with exclusions; • $500,000 per person per accident with exclusions; • $250,000 per person per accident with exclusions:

. One or both of the following conditions must be satisfied in order to choose this option:

o A named insured who is not covered by PIP medical has qualifying health insurance that isn’t Medicare.

o Any resident relative or spouse who does not qualify for PIP medical coverage has qualifying health coverage;

• $50,000 for each individual involved in an accident:

Both of the following conditions must be satisfied in order to choose this option:

o The applicant or named insured has qualified health coverage, is enrolled in Medicaid, or is covered under another auto policy with PIP medical coverage; AND o Any spouse and all resident relatives have qualified health coverage, are enrolled in Medicaid, or are covered under another auto policy with PIP medical coverage;

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• Medical PIP coverage is not available:

Both of the following conditions must be satisfied in order to choose this option:

o The applicant or named insured has Medicare Parts A and B coverage; AND o Any spouse and any resident relatives have eligible health coverage or are covered by another auto insurance with PIP medical coverage.

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Under your vehicle policy, you must select the level of PIP medical coverage you want. If you do not make a choice, your policy will be issued with unlimited PIP medical coverage, for which you will be paid the appropriate premium.

2. Property Security (PPI).

In Michigan, no-fault insurance will pay up to $1 million for damage your car causes to other people’s property, such as buildings and fences. It also covers any damage your car causes to another vehicle that is properly parked. It does not cover any other vehicle damage.

3. Bodily Injury and Property Damage (BI/PD) Residual Liability Insurance

Except in specific circumstances, Michigan’s no-fault insurance prevents insured individuals from being sued as a consequence of a car accident. This covers situations where the injured party’s insurance coverage is insufficient to meet treatment costs or when a payment is required to recompense someone who has been murdered or gravely injured. This component of your vehicle insurance policy will pay up to your coverage maximum amounts if you are proven legally accountable for damages in the following situations:

• You are 50 percent or more at fault in an accident in Michigan that results in damages to another person’s car that are not covered by insurance;

• You are involved in an accident in Michigan with a non-resident who is an occupant of a motor vehicle not registered in Michigan;

• You are involved in an accident in another state; or

• For up to $3,000 if you are 50 percent or more at fault in an accident in Michigan that results in damages to another person’s car that are not covered by insurance.

Minimum coverage is mandated by law. A no-fault policy will pay up to a specified amount if you are found legally liable. Although you can talk to your agent or firm about purchasing coverage with other limitations, the default coverage is:

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• A person who is injured or killed in an accident may be entitled to compensation of up to $250,000.

• Amounts up to $500,000 for any accident involving several persons who are injured or killed.

• Up to $10,000 in damages to property in another state.

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Take care of yourself and your loved ones.

If you cause another person’s injuries, you may be held accountable for damages for their pain and suffering, as well as the expenses of their medical and other treatment that exceed their vehicle insurance policy’s coverage. Such damages will be covered by your policy’s bodily injury liability limit, but only up to the amount of the limit you set. You will be obligated to pay any amount in excess of the limit you set. This sum might be large, resulting in serious financial ramifications.

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You should discuss your alternatives with your insurance agent or vehicle insurance provider, as well as contact a legal and financial advisor(s) to determine how to best safeguard your assets and income.

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The entire family is covered by a no-fault policy.

A no-fault policy protects all members of your family who live in your home. And a family member is a passenger in another person’s automobile or a pedestrian when an accident occurs, PIP compensation will be granted. It will also cover a motorcyclist who is injured in an accident caused by your automobile, according to the coverage amount you choose on your insurance.

You Might Want to Buy These Three Optional Coverage.

In addition to the mandatory no-fault insurance, you have the option of purchasing additional coverage. On this page, we’ll go through three of the most frequent forms of supplementary insurance.

1. Comprehensive and Collision Insurance.

If your automobile is damaged in an accident, your no-fault insurance will not cover the costs of repairs. If your automobile is correctly parked and hit by another vehicle, the other driver’s no-fault insurance will cover the damage. Except in this one circumstance, collision and comprehensive coverage are the only types of vehicle insurance that will pay for repairs to your automobile.

• Collision coverage pays for your car’s repairs if it is damaged in a collision. Collision insurance is divided into three categories: limited, standard, and wide form. The chart on the next page explains each category and what it entails. The deductible in the table refers to the amount you agree to pay toward the cost of repairs before the insurance company kicks in and pays the rest. The higher the deductible, the cheaper your collision insurance will be.

• Comprehensive insurance covers your automobile in the event that it is stolen, or if it is damaged by a falling item, an animal, or a fire, flood, or vandalism.

If you have an older vehicle, collision and comprehensive coverage may not be necessary. If you have a loan on your automobile, the lender may force you to get collision and comprehensive coverage.

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2. “Mini-Tort” insurance for limited property damage liability.

The $3,000 liability indicated in the section on residual liability insurance is usually covered by most firms.

3. Coverage for towing and rental cars.

Most insurance carriers provide towing and rental car coverage, which typically covers or reimburses the cost of towing and/or a rental automobile for eligible situations (accident, breakdown, flat tire, etc.). In most cases, the cost is little in comparison to the entire policy premium.

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Many insurance providers, on the other hand, offer memberships in clubs that provide these sorts of advantages to its members. For the same sorts of activities, these groups usually give just a little amount of compensation. Additional perks may be available, and membership costs vary significantly. To evaluate if the product is good for you, ask your agent how much the membership costs, how the product operates, and what additional perks come with the membership.

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What Should You Do If You Have a Problem or a Question?

The Michigan Department of Insurance and Financial Services (DIFS) can assist you if you believe your vehicle insurance provider is unfairly delaying or denying your claim, charging you the incorrect rate, or otherwise failing to act as required by law. DIFS recommends that you try to settle your issue with your agent or vehicle insurance provider first. If you’re still unhappy, call DIFS’ Office of Consumer Services at 877-999-6442 to ask questions or register a formal complaint against the corporation, agent, or agency. You may access the DIFS complaint form by clicking here.

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About DIFS

The Michigan Department of Insurance and Financial Services’ mission is to ensure that Michigan residents have access to safe and secure insurance and financial services that are essential for their opportunity, security, and success, while also encouraging economic growth and sustainability in both industries. In addition, the Department helps Michigan residents with consumer protection, outreach, and financial literacy and education. Contact DIFS at 833-ASK-DIFS or go to website www.michigan.gov/DIFS for further information.


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