Yes, Michigan is a no-fault state for car insurance. In the event of an auto accident, a Michigan driver’s no-fault personal injury protection (PIP) insurance pays for his or her own medical expenses, lost wages and at-home services like cleaning or laundry. It does not matter who caused the accident, unlike in fault states, where the at-fault driver must pay for the other party’s expenses.
Minimum Limits Required By Michigan Insurance Laws
Bodily injury liability: $50,000 per person / $100,000 per accident
Michigan No-Fault Restrictions on Car Accident Lawsuits
Each no-fault state has its own rules for when you can sue an at-fault driver after an accident. Currently, Michigan is one of the strictest no-fault states in the country, only allowing you to sue the at-fault driver under very limited circumstances.
When You Can Sue According to Michigan No-Fault Laws
If the accident is in Michigan and causes death, serious injury, or permanent disfigurement
If a Michigan driver is involved in an accident in another state
If a Michigan driver is in an accident within the state involving a non-resident driving a car not registered in Michigan
If the at-fault driver is sued, their liability policy will pay up to its limits. If the court awards more than their limits, they will be personally responsible for paying the amount not covered.
Michigan’s auto insurance reform law allows drivers to opt out of buying unlimited personal injury protection (PIP), but they need higher liability limits. Michigan’s auto insurance reform law changed the state’s car insurance requirements for policies issued or renewed after July 2020. Michigan’s insurance reform also decreased the Michigan Catastrophic Claims Association (MCCA) fee, which drivers must pay if they purchase unlimited PIP insurance.… read full answer
Michigan Auto Insurance Reforms After July 2020
Drivers need $250,000 in personal injury protection per person, with lower limits or exclusions allowed for drivers with Medicare, Medicaid, or qualified health care.
Insurers must offer an optional supplement to PIP insurance that covers attendant care, such as home nursing.
Insurers must offer $3,000 in limited property damage liability insurance, which applies if you are 50% or more at fault in an accident and the other driver sues you for vehicle damage.
Michigan has some of the most expensive car insurance premiums in the country, as well as high fraud rates. To combat this, Michigan’s auto insurance reform law implemented several new consumer protections.
Consumer Protections Created by Michigan’s Auto Insurance Reform Law
Insurance companies can no longer consider gender, home ownership, marital status, credit score, educational level, occupation, and ZIP code when determining rates.
Drivers cannot be penalized for a lapse in auto insurance coverage as long as they apply for insurance by January 1, 2022.
Michigan insurers must reduce PIP premiums, and all premiums need to be approved by the Department of Insurance and Financial Services.
A new fraud investigation unit was formed.
Fees and penalties for insurance companies who violate laws increased.
Car insurance is so expensive in Michigan because the state has the highest minimum coverage requirements in the country. Michigan is also a no-fault state, meaning that drivers are required to purchase personal injury protection (PIP) to pay for injuries after a crash, regardless of who was responsible. While this is not unusual in a … read full answerno-fault state, Michigan’s PIP requirements are particularly high. Most policyholders will need at least $250,000 in PIP, and drivers even have the option to purchase unlimited PIP.
Finally, the high cost of insurance in Michigan has made coverage unaffordable for many drivers. Roughly 1 in 5 drivers in the state is uninsured, according to the Insurance Information Institute. Fewer insured drivers to pay premiums drives up rates for those who are paying. Similarly, a high rate of insurance fraud, fueled by Michigan’s generous benefits, has pushed premiums higher still. Studies show that 8%-10% of all claims in Michigan are fraudulent.
To summarize, high required coverage limits, fraud, and a large proportion of uninsured motorists have made Michigan one of the most expensive states for car insurance.
No-fault insurance is bad because car insurance premiums are higher in no-fault states, and it is difficult for drivers to sue for damages related to pain and suffering. No-fault insurance also does not penalize negligent drivers as much as so-called tort states.
Why No-Fault Insurance Is Bad:
Insurance rates are higher in no-fault states than tort states, on average, because more coverage is required.… read full answer
Your ability to sue an at-fault driver is limited.
Negligent drivers face less of an insurance penalty when they injure someone in a wreck.
No-fault states have higher traffic fatality rates than tort states.
It’s easier to commit insurance fraud in no-fault states.
On the other hand, there are also benefits to no-fault insurance. For example, no-fault insurance pays for medical expenses after all accidents, so it helps drivers immediately get their bills covered without having to wait for fault to be determined.
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