Moving to Michigan? Here’s What You Need to Know About the No-Fault Insurance State
First of all, what is no-fault insurance?
In no-fault auto insurance states, individuals who are injured in an auto-related accident receive benefits from their own insurance company - regardless of who caused the accident.
How is this different from other states?
Only 12 states within the United States are considered ’no-fault’. All others require an injured person to seek recovery from the at-fault driver.
Is there any benefit to this?
The benefit of a no-fault system is prompt payment of claims without having to file a lawsuit for most economic losses. Are there any exceptions? You can, in fact, sue for pain and suffering, as well as excess economic losses in accidents involving death and other serious impairments.
Am I required to have no-fault insurance?
YES. No-fault insurance is required by law in Michigan. Every owner of a car must by certain basic coverages in order to get license plates. It is against the law to drive your car without no-fault insurance. In-fact, it is considered to be a misdemeanor offense.
Are there any limitations?
Yes. No-fault insurance only applies to collisions between two vehicles. In Michigan, each driver goes back to their own carrier to have their damages taken care of (similar to medical). However, a negligent driver can be sued for damages under a Limited Property Damage Liability provision, which allows recovery up to $1,000 for damages to the vehicle or reimbursement of a deductible.
Furthermore, if a person collides with a parked vehicle, the person whose property was damaged will receive reimbursement for that damage whether or not the item was insured from the negligent driver.
Michigan no-fault auto insurance can be complicated, which is why it’s important to understand insurance policy and allotted coverages. Stay up to date with no-fault insurance updates by visiting drivingmichigan.org. Interested in learning more about Michigan no-fault insurance? Our experienced agents are standing by: (800) 350-7676Resources: drivingmichigan.org michigan.gov carinsurance101.com