The Michigan No Fault Law
Michigan insurance law differs from other states in that it is a no-fault state. While some other states do have some no-fault policies in regards to injuries, Michigan is the only true no-fault state for both injuries and damage. This can make understanding the state’s insurance laws somewhat challenging, especially if you are new to the area.
In general, what “no-fault” insurance means is that every person’s insurance policy is responsible for paying his or her own injuries and damages after an accident, regardless of how that accident occurred. In other states, the liability of a claim would rest on the shoulders of whichever party caused the accident. In Michigan, fault becomes more or less irrelevant to the way the claim is handled.
Collisions in Michigan
There are several types of collision coverage that can be purchased in Michigan, depending on how much the insured is willing to pay and how much protection he or she wants:
- Broadform collision coverage pays for all damage to the insured’s vehicle regardless of fault. If you are at fault for the accident, you pay a deductible. If not, your deductible is waived.
- Standard collision pays for all damage to the insured’s vehicle regardless of fault, but the insured must pay a deductible for all claims. If you are not at fault, you can file a mini-tort claim against the other driver’s insurance to recover your deductible.
- Limited collision pays only for the damage sustained to your vehicle when you are not at fault for the accident. If you are at fault, your insurance cannot pay for the claim.
- When purchasing auto insurance in Michigan, you’ll have a choice between these three types of collision coverage. The price does vary between them, so you’ll want to take that into consideration.
How Injuries are Handled in Michigan
Collision damage is not the only thing covered under Michigan’s no-fault laws. Injuries are also handled in this way, which can be very confusing to people unfamiliar with no-fault policies. When buying auto insurance, you will be required to purchase medical payments coverage that will pay for your injuries as the result of any accident, including those where you are not at fault.
There is a hierarchy to the way insurance is applied to a claim:
- Your insurance pays for your injuries if you are injured, even if you are a pedestrian or passenger in another vehicle.
- If you do not have insurance, a resident relative’s insurance policy will pay for your injuries.
- If you do not live with someone who has insurance, the owner of the vehicle you were occupying is responsible.
- If the owner has no insurance, the driver’s insurance will be responsible for the claim.
- If the driver also does not have any insurance, the claim will be assigned to the State of Michigan Assigned Claims Facility.
Because this can get very confusing, it’s always a good idea to hire an attorney in situations like this. This is also a good reason to ensure that you always carry an up-to-date auto insurance policy with the appropriate coverage.
Lifetime Benefits Coverage
Aside from its no-fault law, the other thing that makes Michigan unique among all states is that Michigan requires medical payments to be paid for the lifetime of the insured. This means that you will continue to receive medical benefits for as long as you have any injuries or complaints arising from an auto accident. In the case of some serious accidents that result in disability, the insurance company may be required to pay you for the rest of your life.
This, too, is a good reason to hire an attorney. Because paying for the full duration of your injuries can get expensive, insurance companies are often less than eager to accept a diagnosis that will result in long-term benefits payments. Having someone on your side who can ensure these negotiations will go through is very valuable.
Does the Other Driver’s Insurance Ever Pay?
Although Michigan is a no-fault state, there are a few situations where a third-party claim can be filed against another person’s auto insurance policy. All monetary damages, including property damage and medical expenses, are paid under your own insurance policy. However, it is possible to sue the other party’s insurance for things outside of monetary costs, such as pain and suffering.
For example, imagine that you are involved in an auto accident with a drunk driver. Your own insurance company will pay for the damage to your vehicle, your medical expenses and the wages you lose from work during the time you’re recovering.
The drunk driver’s insurance, however, can be made to pay for your pain and suffering as a result of the accident. Additionally, you may be able to file a claim for scarring, disfigurement or long-term disability resulting in more than three years of lost wages. The other party’s insurance would also be required to pay a settlement for wrongful death in the event of a fatal car accident.
Unsurprisingly, insurance companies are reluctant to pay these claims, and it can be difficult to achieve a settlement on your own. If you’re in an auto accident serious enough to warrant this type of claim, it’s imperative that you find a qualified attorney who can represent you.