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What does no fault car insurance mean in Michigan?

Michigan residents know that the vehicle insurance system here is the no fault system. This type of insurance is a good thing and a bad, depending on which side of an issue you are on.

Making a claim under the no fault insurance system means that you will turn to your own insurance company for benefits if a crash occurs. There are some instances in which a person might need to seek compensation for an injury that occurs during a crash. This usually occurs when the injury is catastrophic.

Who has coverage under a Michigan no fault insurance policy?

Every family member in the household at the address where the policy owner lives. This means that if you get into an accident, your own policy covers the injuries to your spouse or children. It can also cover people who don't have no fault insurance, such as those from out of state. People who are disfigured, die or suffer a serious injury without their own no fault coverage are also covered up to specific limits.

The coverage that the no fault policy provides also extends to instances in which a family member suffers an injury in another vehicle or as a pedestrian. This is one of the good things about no fault coverage since you can count on coverage even if the accident doesn't involve your vehicle.

What coverage limits apply to these policies?

In the case of medical bills for people in the household of the policy holder, no fault coverage pays for the lifetime medical care costs that occur because of the injury that was the result of the crash. It is also possible for you to receive compensation for lost wages. This equates to up to 85 percent of your normal pay with a maximum of $5,398 per month. There is a 3-year limit for these payments. These payments are made to your family members if you die in a crash.

When your insurance has to pay for medical care for other parties, there are limits in place. You have to review your own policy because the limits can vary. At a minimum, you must have $20,000 of coverage for a single person who suffers an injury or death during a crash. You must have a minimum of $40,000 of coverage if more than one person suffers injuries or dies.

Does a no fault policy pay for damages to my car?

A basic no fault insurance policy won't pay for damages to your vehicle. These policies do cover damage to other people's property because of the accident. You can purchase comprehensive and collision coverage if you want your own vehicle covered. Review your policy to determine coverage limits. At a minimum, your policy will cover up to $1 million of property damage in Michigan or up to $10,000 of property damage in another state.

Source: Nov. 30, -0001

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