Michigan's unique no-fault insurance law stipulates that individuals who are hurt or die in a Michigan car accident are covered by their own insurance company, not "the other guy's" carrier, regardless of who is at fault.
Anyone involved in a motor vehicle accident in Michigan is entitled to certain no- fault benefits (unless they were driving a car that they owned without insurance). Pedestrians, cyclists, and sometimes motorcyclists are entitled to no-fault benefits. In situations where no apparent insurer exists, Michigan car accident attorneys identify the company that must handle the claim.
Michigan no-fault can seem confusing at first. Here are its key points:
What the "No-Fault" in Michigan's No-Fault Law Means
Under Michigan's no-fault system, which has been in place since 1973, it doesn’t matter who is at fault in an accident. Driver A's insurance covers Driver A, Driver B's insurance covers Driver B, and so forth.
Michigan no-fault insurance pays medical and wage loss benefits, and damage to non-vehicular property such as buildings and fences. No-fault does not pay for repairs to vehicles, with one exception: if Car A is properly parked in a "safe and reasonable" manner and is damaged by Car B, Car B's insurer must pay for repairs.
Put another way, under Michigan's no-fault system, drivers with collision coverage look to their own insurers to pay for damage to a car they're operating at the time of an accident, even when another driver is to blame. What if you don't carry collision insurance? You'll have to dig into your own pocket. Blameless and mostly-blameless drivers without collision coverage can file a $500 "mini-tort" small claims action against the at-fault motorist to help pay for repairs.
Michigan No-fault Insurance Provides for Victims in Several Ways
A. Unlimited lifetime coverage for medical and rehabilitative costs including hospital stays, out-patient treatment, prescriptions, diagnostic tests, braces, wheelchairs, beds, nursing services, home attendant care, medical services performed by family members, and reasonable transportation expenses incurred in obtaining medical treatment. Handicap accommodations to an injured person's home and automobile may be included within the scope of medical benefits.
B. Wage loss protection that requires the no-fault insurer to pay 85% of salary or wage losses for three years. Wage loss computations are based on one's actual loss of earnings. This includes salary increases, overtime, cost of living adjustments, and other similar items which might have been earned during the period of disability. The statutory maximum amount for wage loss is approximately $70,000 annually.
C. Replacement services (for lawn mowing, house cleaning, etc.) of $20 daily, for as long as three years.
D. The family of a person who dies in a Michigan care accident is entitled to medical, funeral and possibly wage "survivor loss benefits" under the no-fault law.
Catastrophic Coverage Under Michigan's No Fault Insurance
By at least one measure, Michigan has the best auto insurance protection in the country. Since it was enacted in 1973, the State's unique no-fault law has provided car accident victims with unlimited and lifetime coverage for catastrophic medical expenses.
Michigan is the only state with such a no-cap benefit. The Michigan Catastrophic Claims Association (MCCA) was created in 1978 by the state Legislature as a non-profit organization to reimburse no-fault insurance companies for each Personal Injury Protection (PIP) medical claim they pay in excess of $480,000. That means that the insurance company pays the entire claim, but is reimbursed by the MCCA for medical costs over $480,000.
All auto insurers operating in Michigan are assessed $143.09 per vehicle in 2010-11 to cover the catastrophic medical claims assessments, which they pass on to policyholders.
The MCCA paid out $811 million in 2009 for claims resulting from catastrophic injuries motorists suffered in automobile accidents. Since 1979, there have been over 24,500 reported claims, which will cost an estimated $71 billion.
Michigan Car Accident Lawsuits Under No-Fault
Michigan's No-Fault Act severely limits lawsuits for bodily injuries, and then only if the other driver is at least 50% at fault. Negligence suits are successfully brought if they involve death, disfigurement, disability, time missed from work, and medical treatment for:
- Fractured and broken bones
- Back and neck injuries, like herniated and bulging discs
- Nerve damage
- Injuries that require surgery or substantial treatment
- Closed head and traumatic brain injuries
- Spinal cord injuries
- Psychological injuries, like depression and post-traumatic stress disorder
- Injuries which impair work and other daily activities
Michigan car accident attorneys advise victims to file a lawsuit with the court within three years of the date of an accident.
Michigan No-fault Insurance is Mandatory
All resident motorists must carry minimum no-fault liability coverage before registering their vehicle. The minimum auto liability amounts are $20,000 bodily injury liability for one person, $40,000 bodily injury liability for all injuries in one accident, and $10,000 property damage liability.
On average, Michiganders pay more for collision and comprehensive coverage than drivers in any other state because of bad roads, bad weather, a plethora of deer, big vehicles and the high cost of labor.
The average driver in the state will pay $979 per year to carry the minimum amount of coverage required to comply with the Michigan car insurance requirements. The average auto insurance premium for residents in Michigan is $1,969 in 2010; the national average is $1,545
George Daleiden - I was a science major in college and later a career member of the Institute of Food Technologists. I worked in the processed food and ...
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