Understanding Michigan's Complex No-Fault Law

Those who live or work in Southern Michigan or Northern Indiana, in places like South Bend, Elkhart, Mishawaka, Niles, Michigan City, Benton Harbor, or Three Rivers, might be familiar with the term “Michiana.”  The name comes from the many people in these locations who frequently travel across the state line for shopping, work, or recreation. 

Keller & Keller has represented several Michigan residents that were involved in accidents while traveling into Indiana. Many times these clients have hired us because of the complexities associated with Michigan No-Fault law. Likewise, we also have clients who are residents of Indiana but were injured in an accident while traveling in Michigan.

In 1973, Michigan adopted the no-fault system in order to increase benefits paid to injured parties, insure prompt payment and reduce the amount of premiums paid out of administrative and legal costs. Conversely, Michigan motorists have surrendered the right to pursue litigation, except in the case where a traveler dies or is seriously injured.

Michigan’s No-Fault laws are complex. Simply put, an accident victim's medical costs are paid by his own insurer, even if the other driver involved is completely at-fault. No-fault policies are comprised of PIP (Personal Injury Proection), PPI (Prpoerty Protection) and Residual Liability Insurance.

No-fault insurance policies do not cover damages to the victim's vehicle, however, and many travelers choose to buy additional coverage, such as collision and comprehensive insurance and limited property damage liability insurance.

Drivers found to be operating a vehicle without no-fault insurance coverage face a fine of up to $500 and up to a year in jail. Failure to provide proof of insurance can result in suspension of a motorist's driver's license for 30 days.

Those who driver without no-fault insurance may be sued and held personally liable for damages and injuries incurred in an accident. As a result, Michigan law requires insurarers to offer coverage to anyone who is eligible under the Essential Insurance Act (a suspended license, history of insurance fraud, certain felony convictions and sub-standard vehicles are legimitate reasons for denial).

There are time considerations and limitations that favor insurance carriers, and without a full understanding of this area of law, you could lose your rights to the benefit of the insurance carrier. 

For example, if you qualify for Michigan No-Fault benefits, you must file an application with the appropriate insurance carrier within one year of the accident date, or your benefits could vanish.  Many people are unaware of this. 

Contact an attorney with experience in Michigan auto accident injury cases, to ensure that you do not lose the benefits you deserve.

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