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No-Fault Insurance Explained

Mandatory & Optional Coverages 

No-Fault Insurance Explained 

Michigan's No-Fault law became effective October 1, 1973. It was created by state lawmakers to: 

  • Assure people injured in auto accidents are compensated, quickly and equitably, for medical costs and lost income.  
  • Limit lawsuits so benefits could be paid quickly.  

All drivers in Michigan are required, under the No-Fault Insurance law, to have the following mandatory insurance coverages: 

1) Personal Injury Protection 

Personal Injury Protection coverage applies to accidents occurring throughout the United States and Canada and may provide coverage to any injuries involving a motor vehicle. Benefits are paid to an accident victim by their own insurance company. Those benefits can include: 

  • Your reasonable and necessary medical expenses. 
  • Up to three years of lost wages. 
  • $20 a day for services you cannot perform. 
  • If you are killed, benefits for your dependents. 
  • Benefits for funeral and burial expenses. 

2) Property Protection 

This provides coverage if your car causes damage to property of others (except moving vehicles), regardless of fault. Key details of (PPI):  

  • Coverage is provided up to $1,000,000.  
  • Vehicles are excluded from coverage, unless properly parked. 
  • Does not apply to accidents occurring outside the state of Michigan. 

3) Residual Liability 

This provides protection if you are sued or are legally responsible in: 

  • An accident involving death, serious impairment of body function or permanent, serious disfigurement. 
  • Accidents occurring outside of Michigan, for property damage and bodily injury. 
  • Actual damages from an accident exceed the amount of coverage available under Personal Injury Protection. 

The required limits of this coverage are: 

  • Up to $50,000 for one person's injury 
  • Up to $100,000 for all persons injured in one accident 
  • Up to $10,000 for property damage.  

(Higher limits may be purchased) 

Source: Michigan Department of Insurance and Financial Services (DIFS)  

 

Additional Info & Optional Coverages

Have questions about your insurance needs? Discuss them with one of our local agents who will help you find a policy that’s right for you. Contact an agent today.  

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