Drivers moving to Michigan likely understand the necessity of purchasing an auto insurance policy. They might not realize that Michigan is a “no-fault” auto insurance state. Drivers or passengers injured in an accident may follow a different claims process than was the case in their previous state of residence.
How a no-fault auto policy works
With no-fault auto insurance, drivers purchase personal injury protection, or PIP, coverage. PIP coverage allows someone injured in an auto accident to file a claim against his or her auto provider. The claimant does so regardless of who caused the collision. Michigan’s no-fault auto insurance statutes also require drivers to carry residual liability insurance for property damage and bodily injury coverage along with property protection insurance.
Some drivers might find no-fault laws preferable since suing another party to recover losses may be more challenging in some instances than filing a claim against one’s insurance policy. In addition, no-fault laws might protect an at-fault party from a lawsuit when car accidents occur. Filing a no-fault claim could eliminate the ability to take legal action against another party.
Other matters to consider in a no-fault state
The law does not eliminate the ability to sue another driver for damages. Car accidents resulting in death or serious bodily injury open legal doors for lawsuits under liability claims. The same could be the case when the at-fault driver is a non-resident driving a vehicle not registered in Michigan.
Whether an injured person is filing a no-fault or liability claim, insurance companies may present challenges. “Lowball offers” or refusals to pay out on valid claims could complicate the situation. Sometimes, taking legal action against an insurance company becomes unavoidable in order to recover compensation.