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
Michigan’s no-fault auto insurance law provides unlimited lifetime coverage for medical expenses resulting from auto accidents. To ensure the financial stability of companies providing auto insurance in Michigan, the state Legislature created the Michigan Catastrophic Claims Association (MCCA) in 1978. The law requires all insurance companies that write automobile insurance in the state of Michigan to be members of the MCCA.
The MCCA reimburses auto no-fault insurance companies for each Personal Injury Protection (medical) claim paid more than $580,000.
If you and/or your passengers are injured due to the negligence of an uninsured or underinsured driver, you may seek compensation for injuries and damages through the uninsured motorist (UM) and underinsured motorist (UIM) portions of their policy.
- UM coverage pays for your injuries when someone without car insurance causes an accident or when you're injured by a hit-and-run driver.
- UIM coverage kicks in when someone else causes an accident but doesn't have enough insurance to cover all your expenses.
Both UM & UIM are optional coverages that can help pay for lost wages if you are unable to work due to your injury.
Collision coverage helps pay to repair or replace your vehicle if it’s damaged in an accident with another vehicle or object, such as a tree or fence. There are three types of insurance forms available: Broadened, Regular and Limited Collision.
Comprehensive coverage provides payment for loss or damage to the vehicle from causes other than Collision or upset. Glass breakage, falling objects, fire, theft, explosion, hail, flood, or colliding with an animal are all covered perils.
Both Collision and Comprehensive are optional coverages available on the Farm Bureau Insurance Personal Automobile policy.
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.