Michigan is a unique state when it comes to automobile insurance coverage.  Michigan, as most people have heard, has a “no-fault” system. Most people don’t know exactly what that means.  Simply put, it means that in the event that an automobile accident results in damage or injury, each individual involved in the accident looks to his own insurance company to cover his own damages, regardless of who was at fault.  

For example, if you are speeding, while texting, and run a red light and slam into another driver’s vehicle, and, as a result, suffer two broken legs and two broken arms, you can simply make a claim to your no-fault insurance company, and all of your medical bills, lost wages, household replacement services, medical transportation and attendant care services will be covered.  It does not matter that you were clearly at fault for causing your own injuries.  That’s why it’s called “no fault insurance.”

Where fault matters is in situations where a driver suffers a “threshold injury,” whereby they are seriously injured or suffer permanent disfigurement.  At that point, it becomes necessary for the injured party to prove that someone, other than themselves, was responsible for causing the accident that led to the threshold injury before they would be entitled to compensation.

Michigan law requires drivers to obtain three specific types of insurance coverage: 

Personal Injury Protection (PIP) – PIP pays all reasonable and necessary medical expenses if you are hurt in an auto accident, including wage loss and replacement services up to three years.

Property Protection (PPI) – PPI pays up to $1 million for damage your vehicle does in Michigan to other people’s property, such as buildings and fences. 

Residual Bodily Injury and Property Damage Liability (BI/PD) – BI/PD pays, up to the limits of the policy, your defense costs and any damages you are found liable for, as the result of an auto accident in which someone was killed or seriously injured. The minimum limits of coverage that everyone must purchase are $20,000 per person who is hurt or killed in an accident, $40,000 for each accident if several people are hurt or killed, and up to $10,000 for damage your vehicle does to property damage in another state. These minimum limits are often referred to as 20/40/10.

If a driver fails to obtain the necessary coverage and drives a vehicle anyway, they are guilty of a misdemeanor.  In addition, if they are injured in an accident, they will not be allowed to have any of their injuries covered, even if someone else is clearly at fault for the accident.  

— Kassem Dakhlallah is a partner with Jaafar & Mahdi Law Group, P.C.  His practice focuses on complex litigation, including class actions, representative actions, commercial litigation, civil forfeiture and personal injury. He can be reached at (313) 846-6400 and kassem@jaafarandmahdi.com.