How Does Car Insurance Work in Michigan?

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How Does Car Insurance Work In Michigan?

If you’ve been injured in a car accident, the physical and emotional damage can be significant. On top of that, the financial burden you’re experiencing can take a huge toll on your life. When you weren’t responsible for the collision that caused your injuries, holding the liable parties accountable with a personal injury lawsuit can ensure your expenses are covered.

When you live in the state of Michigan, however, insurance can play a key role in whether you’re able to file a lawsuit against the negligent driver. This is because Michigan is a No-Fault state. Understanding the No-Fault state law can be confusing, so hiring a Michigan car accident lawyer can be a great way to get the information you need.

Michigan Is a No-Fault State for Car Accidents


States that have No-Fault laws in place do so to try and simplify the process of personal injury cases in the court system. No-Fault insurance is required for all vehicle drivers in the state of Michigan, and if you’re injured in a wreck, regardless of who was at fault, this insurance will provide coverage for certain losses.

There are limits for the amount that this personal injury insurance covers. You can still file a lawsuit against a negligent driver if you’ve been seriously injured or disfigured in a wreck, if you were hit by a non-resident, or if you were in a collision outside of the state.

State Minimums for Auto Insurance in Michigan

Most states require drivers to hold a minimum for auto insurance coverage. In Michigan, drivers must have:

  • Bodily Injury and Property Damage (BI/PD): This coverage helps with damages when a driver is at fault for an accident in which a person is seriously injured or killed. It also helps with defense costs. Drivers must carry coverage with $50,000 per person, $100,000 per accident, and $10,000 for accidents that cause property damage in another state. This coverage is also called “Residual Bodily Injury and Property Damage Liability.”
  • Property Protection (PPI): PPI insurance policies helps pay for property damage caused by drivers. This covers up to $1 million in damages.
  • Personal Injury Protection (PIP): This kind of coverage helps pay for medical expenses and some lost wages. PIP has different coverage options, and this will determine how much of a driver’s medical expenses are covered. This policy will also help pay for some replacement services, and it can help with funeral and burial expenses if the policy holder passed away due to the accident.

While this coverage may be adequate for some accidents, many victims need to go beyond these policies to seek just compensation. A Michigan personal injury lawyer can review your case and discuss your legal options after a car crash.

Drivers Can Choose from Multiple PIP Policies

In July 2020, Michigan auto insurance laws allowed Michigan drivers to choose their level of PIP medical coverage. Motorists can choose from six different coverage levels, ranging from unlimited medical coverage, to a complete opt-out of coverage for eligible parties. These choices allow drivers to find an insurance option that is affordable.

However, this also means that some accident victims may have damages that exceed what’s covered by their PIP. When this happens, accident victims may be able to seek a lawsuit.

Who Isn’t Covered By PIP in Michigan After a Car Accident?

While motorcyclists should have liability insurance per state laws, they are not covered by their own PIP. Motorcycle accident victims who are in a collision with a car are covered by the driver’s PIP. However, if the driver did not have PIP, bikers still have options. The Michigan Assigned Claims Plan (MACP) allows bikers to seek financial assistance after an auto accident.

Similarly, pedestrians not covered by their own PIP or a family member’s insurance go through the at-fault driver’s PIP policies. Pedestrians are also covered by the MACP if there are no auto policies that apply to them.

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Serious Car Accidents and Michigan PIP


In order to file your lawsuit for damages after a car accident, your injuries must exceed the serious injury threshold outlined in Mich. Comp. Laws Ann. § 500.3135. This includes “serious impairment of body function” or “permanent serious disfigurement,” and even the death of a loved one. Catastrophic injuries that might fall under this threshold can include:

  • Spinal cord injuries and paralysis
  • Amputation
  • Head and neck injuries, including traumatic brain injuries (TBIs)
  • Severe fractures
  • Internal organ injuries
  • Vision loss

Of course, you may have a severe injury not listed here. A car accident lawyer in Michigan can review your case to see if you have a potential lawsuit.

Car Accident Lawsuits Follow the Michigan Statute of Limitations


After an accident, it’s in your best interests to reach out to our team as soon as possible. While many car accident claims are settled outside of court, you want to preserve your ability to file a lawsuit in case settlement negotiations are not successful.

Per Mich. Comp. Laws Ann. § 600.5805, you only have three years to file your lawsuit for damages. Three years will go by very quickly, especially if you are facing severe injuries.

There is also a statute of limitations for PIP claims. Per Mich. Comp. Laws Ann § 500.3145, you only have one year to file your PIP claim. Both of these deadlines are pressing, so the sooner you can reach out to our team, the better.

Reach Out to a Car Accident Attorney in Michigan to Discuss Your Coverage


No-Fault laws can be confusing, but speaking with a lawyer will ensure that everything is made clear. It’s important to know your rights before accepting a settlement offer from your insurance. At Christensen Law, we’ll make sure you’re fully covered, and if possible, we’ll maximize your settlement.

At Christensen Law, our qualified attorneys know Michigan’s No-Fault laws backward and forward. We can guide you through the legal process and ensure you’re financially covered, no matter what the circumstances may be. To schedule a no-obligation consultation with a car accident lawyer today, fill out the contact form below or call us.