Michigan No-Fault Insurance Law

Michigan’s “No-Fault” law provides compensation to people injured in or by vehicle accidents, including pedestrians and bicyclists. As the name implies, those injured are entitled to benefits up to the statutory maximum payment amounts regardless of who is at fault. Thus, if you are injured in a vehicle crash, you are entitled to no-fault benefits from your insurance company even if you were responsible for causing the accident.

To drive legally in Michigan, state law requires you to purchase no-fault automobile insurance. The financial security that results from being insured is one of the most important reasons to purchase insurance. In a serious accident, injuries can amount to hundreds of thousands of dollars in costs to you or your family. Driving without insurance is a crime. It is punishable as a misdemeanor with a fine of up to $500 and up to one year in jail. The court may also order your license suspended for 30 days or until you are able to provide proof of valid insurance.

The Basic No-Fault Policy You Must Buy Has Three Parts: 

(1) Personal Injury Protection (PIP): If you are hurt in an auto accident, this part of your no-fault policy will pay all reasonably necessary medical expenses with no maximum limit. It will also pay up to 85% of the income you would have earned if you had not been hurt, for up to three years. However, the amount that you would be paid for lost income is limited and the limit is revised annually. In addition, you are entitled to “up to” $20 per day in replacement services. This is to pay for routine household services which injured persons are no longer able to provide for themselves or their families, such as housekeeping and yard work. 

(2) Property Protection (PPI):  No-fault will pay up to $1 million for damage your car does in Michigan to other people’s property, such as buildings and fences. It will also pay for damage your car does to another person’s properly parked vehicle. It does not pay for any other damage to cars. 

(3) Residual Liability Insurance – Bodily Injury and Property Damage: The no-fault law protects insured persons from being sued as a result of an auto accident except in certain special situations. In general, you can only be sued: (a) if you cause an accident in Michigan in which someone is killed, seriously injured, or permanently disfigured; (b) if you are involved in an accident in Michigan with a non-resident who is an occupant of a motor vehicle not registered in Michigan; (c) if you are involved in an accident in another state; or (d) for up to $1,000 if you are 50% or more at fault in an accident which causes damages to another person’s car which are not covered by insurance.

Levels of PIP Coverage

In the past, Michigan PIP coverage allowed for unlimited lifetime medical coverage for accident-related care. That changed in July 2020 when a new law allowed policyholders to purchase coverage with different limits. The levels of PIP coverage available in Michigan include:

  • Unlimited personal injury protection (PIP) coverage
  • PIP coverage limited to $500,000
  • PIP coverage limited to $250,000
  • PIP coverage limited to $250,000 with certain medical exclusions (if you qualify)
  • PIP coverage limited to $50,000 (if you qualify)

You can opt out of PIP insurance completely if you have health insurance that covers car accidents. However, many health insurance policies do not cover car crash injuries. Purchasing a policy with unlimited PIP coverage is advisable in almost all situations. While you can buy less PIP coverage and may stand to save a few dollars or your insurance premium, the safest choice to protect you and your family is to get a PIP policy without limits.

Can You Sue an At-Fault Driver After an Accident in Michigan?

Yes, it is possible to bring a claim against the driver who was at fault for the crash. If you have limited PIP coverage and your medical expenses exceed the PIP policy limit, the law allows you to pursue compensation from the at-fault driver for the amount not covered by PIP. In most cases, you would seek compensation from the at-fault driver’s liability insurance. For example, say you had $50,000 in PIP coverage on your auto policy, but you suffered $70,000 in damages. You could seek compensation from the at-fault driver’s liability coverage for the $20,000 that was not covered by your PIP policy.

Why Do Insurance Companies Deny or Devalue Claims?

Insurance adjusters don’t want clients or claimants to understand their rights. Unfortunately, many of them take advantage of an injured victim’s vulnerability as well after they get hurt. At the end of the day, insurance companies have a business to run and want to maximize their profits. This means they need to take more premium payments while paying out less as compensation to injured people. Insurance companies routinely deny valid claims to prevent paying out compensation. And when they cannot outright deny a claim, they try and devalue it. However, they have the responsibility to explain why the claim is not worth the compensation you are asking for. This is where the role of a dedicated personal injury lawyer in Michigan comes in.

Most Common Tricks Used by Insurance Adjusters to Deny Your Case

Below are the ten most common tricks used by insurance adjusters to devalue, diminish, or deny your case:

  • Promising to get a fair settlement for you while claiming to be on your side – The adjuster is working in his or her own best interests, as well as those of the insurance company. Their salary, security and future with the company depend on the outcome of their cases and how much money they have saved their company. This means that your needs are not a priority, as your needs and what the company needs are opposed.
  • Asking for a recorded statement – Adjusters want you to say something that will derail your side of the case, even if it can be taken out of context. Even just saying you are “fine” when asked how you are doing in regular conversation with the adjuster can be used against you if you are claiming injuries after a car accident.
  • Asking you to sign authorization for the adjuster to obtain your medical records – By signing the authorization for your medical records, the adjuster can learn all sorts of personal details about you. Whatever they find can be used against you, even creatively. They want to discredit you and show that your injury is false or from prior issues. You should never sign records over without your lawyer’s advice to do so.
  • Having you agree to a quick settlement with signing of a full release – You may be offered an on-the-spot small settlement in exchange for signing a full release from other damages. Because this often happens even on the scene of the accident, you will not have had time to realize the full extent of your injuries.
  • Delaying payment of your claim – By delaying payment of your claim and making you endure the struggle of lost wages and medical expenses without compensation for a period of time, adjusters know that you will likely “crack” under the pressure and sign for a lesser amount than you deserve, just to gain the quickest payment possible.
  • Conducting surveillance – When you claim injury, the insurance company will most often hire investigators to watch you and even videotape or photograph your movement and activities. They do this to disprove your injuries. Of course, honesty is key in such a case, and you should not claim injuries you do not have. But even in fully honest circumstances, creative photography can provide a false impression that you are not injured.

What Can You Do If Your Insurance Company Denies Your No-Fault Claim?

Insurance claim denials are not the end of the road following a car accident. By state law, the insurance company must handle your claim promptly and honestly and make a “good faith effort” to consider the insured’s interests, as well as its own, when making settlement decisions.

(1) Understand why auto accident insurance claims are denied – Hang onto the denial letter for future reference, as this will become a crucial piece of evidence in your case. Understanding the basis for the denial dictates how you or your lawyer will poke holes in their logic and strengthen your claim. Fortunately, liability is not an issue in a no-fault state like Michigan. However, other common reasons for denying auto accident insurance include: (1) a dispute over the seriousness of the injury; (2) preexisting conditions; (3) you were breaking the law; or (4) You were acting outside your contractual obligations.

(2)  Build your case – We assume that insurance is in place to take care of us following an accident quickly and efficiently. Yet your case will be handled in your best interests only if you take matters into your own hands: (1) take photos of your vehicle, the other vehicle, and your injuries at the scene if you can;  (2) keep all your billing and medical records in one place; (3) avoid signing a FULL medical records release; (4) never issue a recorded statement by phone – it can be used against you in court; and (5) don’t sign a settlement acceptance agreement until you have spoken with a lawyer.

(3)  Contact a lawyer to appeal your denial – Don’t just take the adjuster’s word that the denial was legitimate. See for yourself by seeking the opinion of outside experts who are not beholden to the insurance company. Insurers must pay fairly on valid claims, but they are also for-profit companies with financial obligations to shareholders. Working with an attorney levels the playing field and keeps insurers honest. It costs nothing to call for a free consultation to explore the merits of your claim. 

Get Help from Our Michigan No-Fault Insurance Lawyers

There is no risk to speak with an attorney from Baldwin Legal Services PLLC. We never charge for a consultation, and you will pay no legal fees unless we recover compensation for you. Our experienced Michigan personal injury lawyers can provide many services that will make a difference in your car accident claim. We will: (1) investigate the facts of your crash; (2) review all relevant insurance policies; (3) communicate on your behalf; (4) negotiate with the insurance adjusters; and (5) work with experts to evaluate your medical records.

Contact Us Today

The Michigan No-Fault Law is complicated, especially for people who have recently been in an auto accident and don’t know what to do next. Our insurance attorneys have successfully helped people who were told they had no case or that their case was too old. In addition, our firm retains an attorney who holds a Master of Laws (LL.M.) degree in Insurance Law and knows how to protect you from the insurance companies and to present your claim in the best way possible to ensure your rights are protected and that you get the maximum compensation available. Please call 877-886-1441 or contact us online to schedule a free consultation.

Baldwin Legal Services PLLC represents clients throughout Michigan in Detroit, Troy, Southfield, Warren, Livonia, Novi, Royal Oak, Rochester, Bloomfield Hills, Birmingham, Sterling Heights, Waterford, Farmington, Pontiac, Dearborn, Ann Arbor, Saginaw and communities in Wayne, Livingston, Oakland, Macomb counties.