What's Different About Michigan's No Fault Auto Insurance?

By Aaron Winslow

Michigan auto insurance has a number of differences from car insurance in other locations in the US. No fault insurance is required by law in Michigan, and comes in three major parts: property protection insurance, personal injury insurance, and residual liability, covering property damage and bodily injury. If you need to register your car in this state, you must buy auto insurance in advance and prove you have coverage. Driving without insurance is against the law.

Michigan no fault insurance policies reimburse drivers for medical costs and lost income for up to three years. Lost income reimbursement is currently around four and a half thousand dollars, and applies when an insured driver is killed as well as injured. In the case of a death, the money is paid to the family of the insured person.

When someone is hurt in an accident and can't provide basic family services like housework or maintenance, another twenty dollars per day is available for hiring others to perform these duties. Michigan no fault insurance coverage can be synchronized to an existing disability or health policy to cut premium costs, as long as that policy doesn't come from Medicaid or Medicare. The synchronized policy then becomes the primary payer, and your auto insurance covers only what remains.

If you have Michigan no fault insurance, your policy will pay up to a million dollars in damage done by your car to other people's property, such as fences, buildings, lamp posts and other objects. If you do damage to someone else's vehicle, and that car is properly parked, this policy will also pay for that damage.

The no fault law in Michigan is also useful for protecting people covered by Michigan auto insurance from lawsuits, though there are situations where you can still be sued. If you caused an accident where someone else was seriously hurt or killed, you were involved in an accident with an out of state car, or your accident occurred outside of Michigan, you may still be sued.

You could also be sued for up to five hundred dollars worth of damage to another vehicle if you were more than fifty percent at fault in causing the accident. However, when you're sued or otherwise legally responsible for damages, you'll receive payment up to your coverage limits from your Michigan no fault auto insurance.

Michigan requires a minimum of twenty thousand dollars in bodily injury and property damage residual coverage for every person who is hurt or killed in an accident, as well as up to forty thousand for each accident where several people are hurt or killed. Up to ten thousand dollars of coverage for property damage in another state is also required for Michigan auto insurance. Be aware, however, that the court might award more than this, and you would be responsible for the excess.

So what doesn't Michigan no fault insurance cover? Collision insurance, which covers repairs to your car, is not required. Comprehensive insurance is also not mandated by law, and covers damage to your car if it is stolen, or damaged by fire, flood, animals, vandalism, or falling objects. If you are hit by an uninsured motorist and have not voluntarily purchased coverage for this, you will also not be covered by regular Michigan auto insurance.

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