Michigan No-Fault Insurance: The System That Makes Michigan Different
Michigan's no-fault auto insurance system is fundamentally different from every other state except a handful, and the 2019 reform made it even more complex. Whether you've just been in an accident or you're trying to understand your coverage options, this is what you need to know.
How Michigan No-Fault Works
Under Michigan's no-fault system, your own insurance company pays your Personal Injury Protection (PIP) benefits regardless of who caused the accident. PIP covers medical expenses, 85% of lost wages (up to three years), replacement household services, and attendant care. This means you don't have to wait to prove fault before receiving benefits — your insurer pays first. But it also means you cannot sue the at-fault driver for medical expenses covered by PIP.
The 2019 Reform: Coverage Tiers
Before July 2020, Michigan required unlimited lifetime PIP medical benefits — the only state to do so. The reform under MCL § 500.3107c created five PIP coverage tiers: unlimited, $500,000, $250,000, $50,000 (requires qualifying health insurance), and opt-out (Medicare recipients only). The lower your PIP election, the lower your premium — but the greater your financial risk if you're seriously injured. Koussan Law advises every client on how their PIP election impacts recovery.
Third-Party Claims: When You Can Sue the At-Fault Driver
Michigan's no-fault system does not eliminate your right to sue the at-fault driver entirely. Under MCL § 500.3135, you can pursue a third-party claim for pain and suffering if your injuries result in death, serious impairment of body function, or permanent serious disfigurement. This "threshold" requirement means not every accident qualifies — but fractures, disc injuries, and scarring frequently meet the standard.
Mini-Tort Property Damage
Michigan's mini-tort provision allows you to recover up to $3,000 in vehicle damage from the at-fault driver, above what your collision coverage pays. This applies when the other driver was more than 50% at fault.
Need help navigating Michigan no-fault? Call Koussan Law at (313) 800-0000 or use our case calculator.
