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Basic Takeaways on Sweeping Changes to Michigan’s No-Fault Law for Auto Accidents

On May 30, 2019, Governor Whitmer signed into law landmark changes to Michigan’s 1973 No-Fault Act governing auto accidents and personal injury.  Michiganders need to understand some of the basic changes as they select and renew their automobile insurance.

When Selecting Insurance:

  • The insurance company can no longer rate you based on home ownership, education level, occupation, postal zones, or credit scores. This change is effective July 1, 2020.
  • PIP coverage guarantees that your insurance company will cover all of your medical costs, among other damages, stemming from an accident. Under the new law, for policies issued or renewed after July 1, 2020, you can select the maximum amount your insurance company has to pay for your medical costs: $50,000 (if you’re enrolled in Medicaid), $250,000, $500,000 and “no limit.” Some drivers may be even able to opt out of having PIP coverage altogether.
  • Effective July 1, 2020, new mandatory minimum insurance requirements for residual bodily injury (injury you caused to someone else) increase to $50,000 per person/$100,000 per occurrence.

If You’re Injured in an Accident

  • The allowable expenses – meaning medical bills and attendant care – is limited to whatever PIP coverage you chose when applying for insurance.
  • As of July 1, 2021, your insurance company does not have to pay for more than 56 hours per week of in-home, family-provided attendant care. Under the old law, it was unlimited.
  • Your medical providers can directly sue your insurance company for any unpaid medical bills.
  • You still have one year to sue your insurance company if it fails to pay your claimed PIP benefits. However, the one year is paused during the time it takes your insurance company to formally deny your claim. However, there is no tolling if you fail to pursue the claim with “reasonable diligence.”
  • If you’re an injured occupant or non-occupant (pedestrian) you can no longer claim medical benefits through the insurer of the owner or operator of the vehicle. Instead, you must apply for benefits through the Michigan Assigned Claims Plan and your medical benefits are capped at $250,000 in most cases.

If You’re Injured in an Accident and Suffered a “Serious Impairment of Body Function

  • The new law tracks a 2010 court opinion and defines the injuries necessary before you can recover damages from a driver at fault for the accident. You can recover if your impairment: is objectively manifested (observable or perceivable from actual symptoms or conditions by someone other than you); is an impairment of an important body function (a body function of great value, significance, or consequence to you); and it affects your general ability to lead your normal life (it has influenced your capacity to live in your normal manner of living).
  • In addition to being able to recover noneconomic damages (such as pain and suffering), under the new law you can also recover economic damages for allowable expenses (medical bills and attendant care) in excess of your PIP coverage if you meet the threshold.

If You’ve Suffered Catastrophic Injuries in an Accident

  • If you selected unlimited allowable expenses and otherwise qualify for Michigan Catastrophic Claims Association coverage, you will be paid unlimited allowable expenses by the MCCA (medical bills and attendant care, although attendant care is now limited if provided by family member).

If You’re Not Injured but Have Minor Damage to Your Vehicle

  • If you’re involved in a minor accident that is not your fault, with no injuries and nominal damage to your vehicle, you can sue the at-fault driver for damage to your vehicle up to $3,000, an increase from $1,000. This provision applies to accidents occurring after July 1, 2020.