Michigan No-Fault Law Overview
Auto accidents in Michigan, or accidents involving Michigan residents, are governed by the Michigan no-fault law. Our auto accident attorneys can use their expert knowledge of Michigan’s no-fault law to help protect the important rights and benefits that may be available to you. If you’ve been injured in an auto accident, you can contact our car accident attorneys, based in Lansing and Grand Rapids, for a free consultation. This website also offers information to help you better understand Michigan no-fault law.
The No-Fault Automobile Insurance Act (MCL 500.3101, et seq.) was adopted by the Michigan Legislature in 1972 and went into effect in October 1973. Michigan is one of only a handful of states in the country to have a no-fault insurance system.
The basic concept of the no-fault system is to guarantee payment of certain insurance benefits to all victims of motor vehicle accidents, regardless of who was at fault. In order to fund such a system, however, the no-fault law imposes certain limitations on the rights of accident victims to bring tort liability claims against the negligent parties who inflicted the injury.
It is helpful to remember that, under the Michigan No-Fault Act, persons injured in motor vehicle accident in Michigan have two separate and distinct claims. The first claim is for no-fault personal protection insurance (PIP) benefits. The second is the tort liability claim, which is brought against the party who’s at fault for recovery of noneconomic damages and excess economic damages.
No-Fault PIP Benefit Claims
Under Michigan no-fault law, an auto-accident victim has the right to recover certain “no-fault benefits” (usually from the victim’s own insurance company), no matter who caused the accident and regardless of whether the injured person was driving or was a passenger in a motor vehicle , or was a pedestrian or a bicyclist. The legally correct name for no-fault benefits is “personal protection insurance benefits” — also known as “PIP benefits,” “no-fault benefits” or “first-party benefits.” Basically, there are four types of no-fault benefits payable under the Michigan system:
- Allowable medical and rehabilitation expenses for life.
- Wage loss benefits for a three-year period.
- Replacement service expenses for a three-year period.
- Survivor’s loss benefits for a three-year period when an accident results in death.
Learn more about No-Fault PIP Benefits.
Auto Accident Claims
Michigan no-fault law also allows an auto accident victim to pursue a tort liability claim against the at-fault driver, to recover those damages that are not paid by no-fault insurance benefits. The compensation recoverable in these liability claims includes damages for “noneconomic loss” and “excess economic loss.” Claims for noneconomic loss require proof that the injury suffered constitutes either a “serious impairment of body function” or “permanent serious disfigurement.” In cases where the at-fault driver causes an accident resulting in death, the decedent’s estate can pursue a tort liability claim for damages under the Michigan Wrongful Death Act.
Why It’s Important to Understand Your Legal Rights
Although the original intent of the No-Fault Act was to simplify motor vehicle claims, in many respects the opposite has occurred. Since the act first went into effect in the early 1970s, thousands of appellate court decisions have interpreted various aspects of the law and what it requires. To date, numerous no-fault issues remain confusing and unresolved by the appellate courts.
However, one fact has clearly emerged from the past four decades of the no-fault experiment: it is critically important for consumers and Michigan auto accident victims to understand their rights. In many situations, an auto accident victim’s incomplete understanding of their legal rights results in a loss of no-fault benefits and a denial of compensation by an insurance provider.
In this video, Grand Rapids personal injury attorney Tom Sinas discusses what it would be like if Michigan did not have its current no-fault system and, instead, had a system where fault had to first be proven (through the filing of a lawsuit) before a car crash victim could receive any insurance benefits.