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Things to Know About No-Fault Insurance Claims in Michigan

If you’ve recently moved to Michigan or you’re a new driver living in the state, it’s important to understand Michigan’s no-fault insurance policy and be aware of the recent changes made to this policy.

Michigan’s no-fault insurance law requires all drivers to purchase personal injury protection (PIP) insurance to cover damages when car accidents occur. PIP insurance removes liability from the equation and makes it easier to recover compensation. Although no-fault insurance law may seem hassle-free, PIP insurance in Michigan is expensive and won’t always maximize your settlement.

Thankfully, there are circumstances when you can sue the at-fault driver in your car wreck. At David Christensen Law, we’ll assess your case and determine whether you can take legal action. Once you’re aware of what your policy covers, you can use your knowledge to move forward with a claim.  

Pros and Cons of the No-Fault Insurance Law

The main benefit of Michigan’s no-fault insurance law is that it removes liability from accidents. Whether you’re at fault for the wreck or the colliding driver is at fault, you can recover compensation for your damages without questions asked. You’ll receive money more quickly for your damages because you won’t need to prove negligence; however, this lack of fault can sometimes be a disadvantage.

For example, if someone causes your accident in a no-fault state, you can’t recover non-economic damages, such as pain and suffering, from your insurance in the same way that you could when suing the negligent party. You may not receive the full amount of compensation you deserve for your damages because the law doesn’t take liability into account.  

New Options for Personal Injury Protection Insurance

The biggest drawback of Michigan’s previous no-fault insurance law was that it required every driver to buy maximum coverage of no-fault insurance, which resulted in Michigan having the highest rates for car insurance. In 2019, Michigan reformed its no-fault insurance law, which will go into effect in 2020. Drivers now have five options for no-fault insurance coverage. The options include the following:

  • Unlimited PIP coverage
  • PIP coverage up to $500,000
  • PIP coverage up to $250,000
  • PIP coverage up to $50,000 
  • The option to opt-out of PIP coverage if you have a health insurance policy that covers car accident injuries. Individuals on Medicaid can’t opt-out of PIP coverage.

The new options outlined in the reformed no-fault insurance law will reduce Michigan drivers’ PIP insurance by up to 45 percent.

When You’re Allowed to File a Lawsuit 

If you’re injured in an accident and your damages exceed your no-fault insurance policy coverage, you can sue the liable party in your wreck to cover the remaining damages you’re owed. You can also sue the responsible party in your collision if you’ve suffered severely disfiguring or life-altering injuries in your accident. You must, however, prove negligence with evidence to obtain a settlement in court.

Contact a Detroit Car Accident Attorney

Michigan has one of the most complex no-fault insurance laws in the country. If you have questions about your insurance policy or want to know whether you can escalate your claim to a lawsuit, you can schedule a free consultation with our team at David Christensen Law. To speak with a Detroit car accident lawyer, fill out the contact form below or call 248-213-4900.