The Michigan automotive insurance program is rather unique. The no-fault insurance means that your own insurance must cover many of the costs associated with a motor vehicle crash regardless of who is at fault.
There are some limitations to this coverage. Here are a few important points you need to know about no-fault insurance:
Minimum coverage amounts
The minimum coverage requirements aren’t usually enough for accidents with catastrophic injuries since these are often costly. While you can purchase more than this, these are the minimum coverage amounts drivers must purchase in Michigan:
- $10,000 in property damage in other states
- $40,000 per accident for multiple injuries or deaths
- $20,000 per person who suffers an injury or dies in an accident
The most basic auto insurance policies aren’t going to pay for damage to your own vehicle. You will have to purchase additional coverage to get this protection.
Because of residual liability, there is a chance that a person who is injured in a crash or the family members of a person who passed away might file a lawsuit. There are specific cases in which this is possible. These include:
- Another person’s vehicle suffers damage that isn’t covered by insurance, but this is capped at $1,000 and only applies if the driver being sued is at least 50 percent at fault for the crash.
- An accident occurs in another state.
- An accident in Michigan kills, permanently disfigures or seriously injures someone.
- A person injured in a crash isn’t a resident of Michigan and wasn’t in a vehicle registered in this state.
Medical costs and lost wages
It is interesting to note that there is no limit to what insurance will pay for medical expenses after a crash. The only stipulation is that the expenses must be reasonably necessary.
These no-fault policies also cover lost wages for up to three years. The cap is 85 percent of the income that you could have earned if you didn’t have the crash-related injuries. Additionally, there is a limit of $5,700 per month that can be paid out for the three-year term. A replacement services stipend of $20 per day is also possible if the person can’t do basic daily tasks and needs assistance.
Because of the complexities of the insurance system in Michigan, finding out what you are entitled to can be challenging. Be sure to do this quickly so you don’t miss out on important time limits that apply to these cases.