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The Basics Of No-fault Auto Insurance In Michigan

The Basics of No-fault Auto Insurance in Michigan

When it comes to auto insurance, Michigan has some of the most unique laws in the United States. No-fault coverage in Michigan is required for every vehicle on the road, and will be built in to any Michigan policy. No-fault coverage is paid through your own policy, regardless of who is at fault. Unlike other states with no-fault coverage, in Michigan it pays for injury and rehabilitation benefits and lost wages in addition to damage to other vehicles if the other vehicle is properly parked. Another difference between Michigan and other states with nofault is that most states have limits up to $50,000 or so, whereas in Michigan the policy provides unlimited benefits. This is why Michigan has some of the highest insurance rates in the country. No-fault auto insurance laws were adopted in 1973 in Michigan in order to improve the level of benefits injured people receive, to make sure payments are made promptly and not held up by liability investigations or the legal process, and to reduce premium dollars paid out for legal and administrative costs. Here are the basics of no-fault auto insurance in Michigan.

Personal Injury Protection (PIP)

PIP coverage is the portion of your no-fault policy that pays the necessary medical costs if you are injured in an auto accident. The insurance company will cover these necessary medical bills for as long as the injury or disability persists, for life if necessary. Unlike a lot of health insurance plans on the private market, no-fault auto insurance will also cover in-home nursing care if needed to help a person with tasks like preparing meals, showering, and getting dressed. PIP also covers a portion of the lost wages you missed out on do to your injuries, for up to three years. Lastly, PIP provides up to $20 per day in replacement services if your injury prevents you from doing household chores like cleaning and yardwork and you need to hire someone to help out.

Property Protection (PPI)

This no-fault coverage is particularly unique to Michigan, paying up to $1 million for damage your vehicle does to other people’s property, like fences or buildings. It also pays for damages if you strike a legally parked vehicle, if that vehicle has collision and/or comprehensive coverage.

Residual Bodily Injury and Property Damage Liability Insurance (BI/PD)

In the case you are found to be liable for an auto accident, this portion of no-fault coverage will pay costs up to the policy limit for defense and any damages. No-fault law in Michigan generally protects you from being sued in most situations, aside from several potential circumstances. If you cause an accident and someone is seriously injured or dies, if you are involved in an accident in another state, or if you cause damages to another person’s car that are not covered by insurance and you are more than 50% at fault, you could be taken to court. You also could be sued if you are involved in an accident in the state with a nonresident who is occupying a vehicle not registered in Michigan.

To get a better understanding of the no-fault auto insurance laws in Michigan, and to make sure you are fully protected, contact an agent with Davis and Davis Insurance and Real Estate at 269-432-3296.

sean clark