Understanding Michigan No-Fault Law - What, Why and How?

The Michigan No-Fault Law is generally an autoinsurance, which covers the claims of the individual irrespective, whether or not the individual is the cause of an accident. This insurance covers the insured individual and the passengers involved in the insured’s passengers for bodily injury. 

The insured person is reimbursed by the person’s insurance company without any proof of fault and can also claim recovery from the civic bodies for losses caused by other parties.

The context “No-Fault” is used commonly in the United States, Canada and Australia by the state/provincial automobile insurance law agents. The argument of the proposers of the no-fault law claims that accidents of the automobile are inevitable and not necessarily the person at fault is on the higher risk side and is likely to be uninsured as well. This law is more prevalent in regions where there are a higher number of uninsured vehicles.

Some issues to ponder

In the United States, most of the states have a traditional tort system for liability in place for auto insurance where the recovery is governed by a set of principles of provable negligence. This set of principles is divided into two: i) quantitative monetary threshold (where a specific amount of dollars should be spent on medical bills before the claim is settled), ii) qualitative verbal threshold (where the seriousness of the injuries like death, disfigurement or permanent disability is considered before the claim is released). 

The state of Michigan follows the quantitative monetary threshold procedure. The Michigan No-Fault Law focuses solely on the damage caused to the body of an individual and the co-passengers of the vehicle irrespective of the person at fault or not.

Primary factors to consider

Michigan no-fault insurance is a mandate by law and every car owner is required to have this insurance in order to obtain the license plate. This law covers the medical expenses, wage loss benefits, replacement services, damage to other people’s property, etc. But this law does not cover the damage caused to the vehicle. The Michigan No-Fault Law covers three basic parts and they are as follows:

• Personal Injury Protection - Pays for all medical costs involved. For permanent disability up to 85% of the income you would have earned if not injured for 3 years.
• Property Protection – pays up to $1 million for damage done by the car to other people’s property and for damage to properly parked cars in the accident zone.
• Residual Liability Insurance – covers bodily damage and property damage – this basically protects people from being sued for automobile accidents that happen due to their fault.