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What is Michigan No Fault Insurance?

Posted on: December 8th, 2009 by admin

Michigan No Fault Insurance

Hello Michiganders.  If you are a new resident in Michigan you may be wondering what no fault insurance is.  Even if you have lived here for years you may still be unclear as to how Michigan no fault insurance works.  Michigan is one of the few states in the country that uses a no fault insurance system.  No fault-insurance is required by law in Michigan if you plan on driving a vehicle. 

In order to get license plates you must first purchase Michigan no fault insurance with certain basic coverages.  If you choose to drive without auto insurance you could be ticketed or even lose your license in the state of Michigan.  In addition to the tickets and having your license revoked you will also be without coverage if you are involved in an accident. 

Now that we got that out of the way let’s take a look at the basic parts of a Michigan no fault insurance policy.  They are as follows:

  • Personal Injury Protection:  If you are injured in an auto accident, this coverage will pay all of your medical costs.  In addition to paying for your medical costs it will also pay up to 85% of your income if you are unable to work due to your injuries for up to 3 years.  The limits to what can be paid out for lost wages varies from year to year.  As of 10/1/09, the maximum is $4,878 per month. 
  • Property Protection:  Your no fault insurance coverage will pay up to $1,000,000 for damage caused by your vehicle to other people’s property.  This $1,000,000 of coverage will apply only while driving in the state of Michigan.  The coverage will apply to the damage you cause to items such as fences, buildings, parked cars, etc. 
  • Liability Insurance- Bodily Injury and Property Damage:  The intent of the no fault system is to protect insured individuals form being sued as the result of an auto accident.  The state of Michigan requires you to purchase a minimum amount of liability insurance.  If you are found legally responsible in an accident your no fault policy will pay out according to the limits that you choose.  At a minimum the state of Michigan requires you to carry the following coverages.
    • $20,000  /  $40,000  /  $10,000
    • In other words if you cause an accident your insurance policy will pay out up to $20,000 to each individual in the other car, with a maximum of $40,000 being paid out per accident.  It will also provide $10,000 in coverage for property damage that you cause while driving outside of the state of Michigan.

There are many ways to purchase Michigan no fault insurance.  The easiest way to shop for insurance in this digital world is to turn to the internet.  Go online and fill out an insurance quote request and let the competition fight to earn your business.

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