Lower Rates Now - ABC's of No Fault

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A B C's of No Fault

Michigan is a "No Fault" state for car insurance. This means that it doesn't matter who is at fault in an accident. Policyholders do not sue "the other guy." Instead, a claim is filed with one's own insurance company for damage to property or person.
No Fault went into effect in Michigan in 1973, with the central promise of a simplified system, generous benefits, and lower rates. In the mid-1970's, Michigan was one of 16 states that adopted this system. Of the original 16, four have since repealed No Fault, and the others have considered repeal. Some states concluded that No Fault premiums were too expensive. Michigan's rates are among the highest in the nation.
No Fault requires all drivers to buy car insurance. Driving without it is a crime.
In 1978 the Michigan Supreme Court ruled that No Fault was unconstitutional. It ordered the Legislature to guarantee "fair and equitable" premiums for Consumers. That ruling has not been followed.
Basic No Fault has 3 parts:
1. Personal Injury Protection (PIP): PIP provides unlimited coverage for medical bills, and up to $4,589 a month for lost wages, for a maximum of 3 years.
2. Property Protection Insurance (PPI): if you hit a parked car, or damage someone's property, while driving, PPI pays up to $1 million in coverage, and
3. Bodily Injury and Property Damage (BI-PD): this covers you up to $20,000 if you are sued after an accident, where one individual is hurt or killed; it covers you up to $40,000 if more than one individual is hurt or killed; and if you are sued for damage to someone's property in another state, BI-PD covers up to $10,000.
  
  Exceptions (where you can be sued):
  - "Mini Tort," where you are mostly at fault in an accident that causes up to $500 in uninsured damage to someone's car.
  - Out-of-state accidents.
  - Accidents in Michigan involving an out-of-state resident and vehicle.
  - If you are the cause of an accident resulting in serious injury or death.
Beyond the minimum required No Fault coverages discussed above, the Consumer has the option of buying three other types of coverage:
2. Collision: this pays for repairing a car that has been damaged in an accident.
3. Comprehensive: this pays for repairing car damage from occurrences such as hitting a deer, vandalism, or fire, and it also covers the replacement cost of a stolen vehicle.
4. Uninsured Motorist: this pays for serious injuries sustained in an accident with another motorist who has no insurance.


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