Michigan No-Fault Automobile Insurance

In Michigan, the no-fault act MCL 500.3101 et. seq., creates a system of receiving insurance benefits without requiring proof of fault in an accident. This system benefits insurance companies and individuals in the aggregate, but is detrimental to the faultless individual. Under fault insurance, an injured party may sue to recover their losses and injuries; or, the injured party may choose to use their own insurance to cover losses and injuries (irrespective of severity).

No Fault, acts as a threshold keeping “minor” suits out of litigation. The No-Fault Act prevents personal injury suits unless the loss or injury exceeds the threshold. And to succeed on a suit, the plaintiff must prove a specific level of loss due to the operation of a motor vehicle (MCL 500.3135). Otherwise, the plaintiff is required to seek recovery from his or her own insurance. For example: Where a scar may not be considered a serious injury (Petaja v. Guck, 178 Mich. App. 577), but that muscle damage or other soft tissue injuries might be serious (DiFranco v. Pickard, 427 Mich. 32). To sue, fault of the defendant must be proven.

In Michigan to acquire an automobile registration, $20,000 per-person, $40,000 per accident, and $10,000 for property damage insurance is a prerequisite (MCL 500.3009, 500.3131). And unless there is more information, all claims of accident are filed through ones own insurance. A third-party has a way through the No-Fault Act if there has been a death, permanent and serious disfigurement, or a serious impairment of bodily function (and then there must be an actual cause of action); or, if there is a lawfully parked car.

An individual may recover only once, and generally may not sue for benefits all ready received. Further, social security and worker’s compensation may be calculated by the insurance company to avoid over paying on a claim.

Attorney Fees Recoverable when a no-fault insurance company refuses to pay benefits or delays in paying benefits, attorney fees may be recoverable. This acts as a motivator to encourage only legitimate individual claims against insurance companies and encourages insurance companies not to drag its feet.

Motorcycles Exempt
Motorcycles, under MCL 500.3101 having only two wheels, are not required to purchase no-fault insurance. Personal liability insurance on the other hand, for those motorcycles using highways, is required (off road vehicles exempt). Additionally, out-of-state cars, parked vehicles, and farm tractors are also excluded.

People injured in Michigan car accidents have less than three-years to contact their attorney before their claim will be barred. Those Michigan residents driving out of state must rely on out of state law, unless they are “lucky” enough to hit or get hit, by another Michigan driver.