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Explanation of Michigan No-Fault Insurance

In 2019, Michigan adopted an updated no-fault insurance law to protect innocent car accident victims and reduce costs for certain drivers in Michigan. The newly revised policy allows injured people to get the medical care and financial relief they need after a car accident, no matter who is at fault. Further, Michigan’s no-fault insurance policy makes it easy to claim benefits, care, and assistance without suing the other driver.

Our staff of licensed, experienced agents at Encore Insurance Group created this guide to explain Michigan’s newly incorporated no-fault insurance laws. For more information, please call us at 248-466-0200.

Is Michigan a No-Fault Insurance State?

Michigan initially adopted a no-fault insurance law in 1973. However, the state legislature made groundbreaking updates to the policy in 2019. The recent changes apply to every Michigan-licensed driver and feature substantial revisions that may affect your coverage.

What is No-Fault Insurance?

Michigan no-fault insurance is a type of legally required car insurance. Michigan adopted a statewide no-fault policy after determining that its previous system resulted in denied compensation, under-compensation, or unreasonable delays in assistance. In many cases, victims had to sue the other driver to receive assistance, resulting in added mental, emotional, and financial duress.

Following the no-fault insurance policy update, you no longer have to sue the other driver to receive compensation for hospital visits or salary reductions. Instead, your insurance company will cover the expenses, including:

  •       Medical care
  •       Lost wages
  •       Household maintenance services
  •       At-home nursing services
  •       Gas mileage for doctor’s appointments

What Happens in a No-Fault Accident?

In a no-fault accident, both drivers may receive benefits from their insurance companies, regardless of who caused the accident. After an accident occurs, you should notify your insurance company immediately and apply for no-fault benefits.

Michigan state law provides drivers with a one-year window to file for no-fault benefits. You may also file a secondary lawsuit against the other driver’s insurance company for any pain and suffering the accident caused, but you must file within three years to qualify.

No-Fault Insurance Michigan Policy Changes

Since the 2019 revision of Michigan’s no-fault law, the state Legislature adopted several new updates regarding personal injury protection, fee schedules, bodily injury coverage, and more. Our Encore Insurance agents will happily assist you in understanding the updates. That said, some of the major revisions are as follows.

1. You Can Choose Your Personal Injury Protection (PIP) Coverage Amount

When Michigan adopted its original no-fault insurance law in 1973, the state required all drivers to purchase unlimited personal injury protection benefits. Since the policy’s revision, the state now allows drivers to choose whether they would like to continue their unlimited coverage or limit their coverage to $50,000 (exclusively for Medicaid enrollees), $250,000, or $500,000.

2. You Can Collect a Higher Mini Tort Recovery

On July 1, 2020, the state increased the mini tort recovery amount from $1,000 to a maximum of $3,000 for any accidents that occur after that date.

3. Coverage Through a Michigan Assigned Claim Plan May Be Limited

Michigan created its Assigned Claim Plan to provide uninsured drivers with no-fault benefits. However, if you claim your benefits through an Assigned Claim Plan, the state now limits your medical coverage to $250,000.

4. You Can Opt Out of PIP Coverage

Medicare enrollees may opt out of PIP benefits coverage entirely and use their Medicare coverage instead.

5. You May Need to Upgrade Your Health Coverage

Finally, drivers must have “qualified health coverage” (or Medicare) to opt-out of PIP Coverage. To select this opt-out you may need to upgrade your health insurance policy.

Find a Reliable No-Fault Insurance Agent at Encore Insurance Group

Don’t wait until after a car accident to secure no-fault insurance coverage. If you’re a licensed driver in Michigan, our staff of compassionate, experienced agents at Encore Insurance Group can help you find a personalized, affordable, and comprehensive insurance plan.

For more information or to schedule a consultation today, please contact our Encore Insurance team at 248-466-0200.