Written by Maurice Davis
The sound of a car crash is just the beginning. After the dust settles and you’ve checked for injuries, you’re often left with a stack of bills and a flood of confusing questions. In Michigan, the first question is usually, “Who pays for this?” Thanks to our state’s unique no-fault system, the answer is often your own insurance company, regardless of who was at fault.
A personal injury lawyer can help you prepare for the worst after a car accident, especially if you aren’t sure how No-Fault insurance works.
What is Michigan’s No-Fault Insurance?
Michigan’s no-fault law is a bit different from other states. It means that after a car crash, you file a claim with your own insurance company to cover specific out-of-pocket costs, like medical bills and lost income. It’s critical to remember that this claim does not cover things like your emotional distress or the damage to your vehicle.
The main part of your policy that handles these payments is called Personal Injury Protection, or PIP. Think of it as the core of your no-fault coverage. This part of your policy steps up to cover your injury-related expenses. It pays out even if the other driver was completely at fault.
What Does Michigan PIP Insurance Cover?
PIP benefits can be a lifeline for crash victims, helping them manage the financial losses that result from their injuries. These benefits are available no matter who caused the accident, and they are essential when medical care is expensive or you can’t go back to work right away.
Medical Bills
PIP will cover any reasonable and necessary medical care related to your injuries. This includes everything from the initial emergency room visit and surgeries to follow-up doctor appointments, physical therapy, in-home care or nursing support, and even prescribed medications.
The amount of medical coverage you have depends on the limit you chose when you bought your policy. You might have selected unlimited lifetime medical benefits or a lower cap to reduce your insurance premiums. The limit you chose is the maximum amount your insurer will pay for your medical care.
Lost Wages
If your injuries are serious enough to keep you home from work, the stress of lost income can be overwhelming. Thankfully, PIP can provide a safety net. It will cover up to 85 percent of your lost income for as long as three years from the date of the crash. This benefit is designed to help you breathe a little easier and focus on healing, not on your next paycheck.
Replacement Services
Have you ever wondered who will clean the house or mow the lawn when you’re recovering from an injury? PIP has you covered here, too. It provides up to $20 per day for replacement services. These payments help you hire someone to do the tasks you can no longer perform, such as house cleaning, yard maintenance, childcare, or even transportation to your appointments. This part of your coverage can be especially helpful if you’re the primary caregiver or handle most of the responsibilities at home.
Survivor’s Benefits
In the tragic event that a loved one dies in a crash, PIP also provides survivor’s benefits to help dependents recover lost income and the value of services the person would have provided. These benefits are available for up to three years following the crash.
What Is Not Covered by No-Fault Insurance in Michigan?
So, what doesn’t no-fault insurance cover? This is where many people get a rude awakening. While it’s a huge help, there are some critical areas that it just won’t touch.
Pain and Suffering
This is a huge concern for many of our clients. No-fault insurance does not pay for non-economic damages like emotional distress, mental anguish, or chronic pain. These are known as pain and suffering damages. To recover these, you have to prove your injuries meet Michigan’s “serious injury threshold”. This is a big legal hurdle, and it only applies if you’ve suffered:
- A serious impairment of a body function,
- Permanent disfigurement, or
- Death.
If your injuries qualify, you can seek compensation from the at-fault driver’s insurance company through a third-party claim or lawsuit.
Vehicle Damage
This is another common point of confusion. PIP does not cover damage to your own car after a crash. To get these costs covered, you’ll need to rely on one of these options:
- Collision Coverage: This is optional coverage you can add to your policy to help repair or replace your car after an accident, regardless of who was at fault.
- Mini-Tort Claim: If the other driver is found to be at fault, you may be able to recover up to $3,000 for your out-of-pocket repair costs under Michigan’s mini-tort law. This can help cover your deductible if you have collision coverage.
- Third-Party Claim: In more serious accidents, you can pursue compensation from the at-fault driver’s liability insurance to cover the full cost of your vehicle damage.
Are There Out-of-Pocket Costs for a Crash?
Sometimes, yes. Your PIP benefits may not fully cover all the expenses from a serious accident. For example:
- You could exceed the medical coverage limit you chose for your PIP policy.
- You could lose wages for more than three years.
- You could experience long-term complications that lead to additional expenses not fully covered by your benefits.
In these situations, an experienced attorney can help you determine if you qualify to file a third-party lawsuit to recover the difference.
How to File a No-Fault Insurance Claim
To get the benefits you deserve, it’s crucial to file your claim correctly and on time. Michigan law gives you a strict deadline: one year from the date of the crash to file your Application for No-Fault Benefits.
Follow these steps to protect your claim:
- Notify your insurer as soon as you can after the crash. Don’t wait.
- Seek medical care immediately and follow all recommended treatments. This creates a paper trail of your injuries.
- Keep meticulous records of your injuries, medical visits, missed work, and any related expenses.
- Work with a trusted attorney to make sure your claim includes all eligible damages.
If you miss the one-year deadline, your insurance company may deny your claim entirely, and you could lose your right to collect benefits.
What If Your No-Fault Coverage Isn’t Enough?
If your injuries are severe and your damages go beyond what your no-fault coverage pays, you may be eligible to file a lawsuit against the at-fault driver. This is your chance to recover damages that your own PIP policy won’t cover, such as:
- Pain and suffering
- Medical bills that exceed your PIP limits
- Future medical care needs
- Loss of earning ability
- Property damage not covered by other insurance
Depending on the circumstances, you may also have a claim against a third party, such as a vehicle manufacturer or a business that contributed to the crash.
FAQs About No-Fault Insurance in Michigan
Can my passengers use my no-fault insurance? Yes, your PIP coverage may extend to passengers in your vehicle, especially if they do not have their own insurance.
Does PIP cover pedestrians or cyclists? Yes, PIP insurance can cover pedestrians or cyclists hurt in a crash.
What happens if I miss the deadline to file a claim? If you do not file your application within one year of the crash, you may lose your right to collect benefits, even if you are eligible. It’s a hard deadline, and the insurance company will not make exceptions.
How do I recover damages for my car? No-fault insurance does not cover car damage. You will need to rely on collision coverage or pursue a mini-tort or liability claim against the at-fault driver.
Contact a Detroit Personal Injury Lawyer Today
Michigan’s no-fault system helps many people cover medical expenses and lost income after a crash, but it doesn’t provide for every type of damage. Plus, insurance companies are known to undervalue or deny valid claims.
If you’re feeling unsure about what your policy should cover or whether you need to file a third-party claim, Davis Injury Lawyers, PLLC is here to help. We will review your situation and help you pursue the full compensation you are owed.
Call us at (313) 462-7973 or fill out our contact form today to schedule your free, no-obligation consultation.