Overview of Michigan No-Fault Auto Insurance Coverage
The State of Michigan requires every car owner to obtain automobile insurance. The basic automobile no-fault policy consists of the following:
PIP - PERSONAL INJURY PROTECTION
If you are hurt in an auto accident, this part of your no-fault policy will pay all of your medical costs, including mileage to and from your medical providers. It will also pay 85% of your wages, up to a maximum amount ($4293 per month in 2005), for the wages you would have earned if you had not been hurt. This coverage only lasts for up to three years however.
If you are seriously injured, you may also collect attendant care benefits, paid at an hourly rate, which are practical nursing services performed by untrained medical personnel. These services can include serving meals, transporting to appointments, bathing, administering medication and assisting with various therapies. No-fault insurance also provides up to $20 per day in replacement services which pays for services you are no longer able to provide for yourself or your family because you are injured, such as housekeeping and yard work.
If you are killed in an accident, your policy will pay your family up to the maximum monthly amount for three years, based on what they would have received from your earnings and fringe benefits.
Often, the insurance company will try and sell coordinated coverage or what is called excess medical or wage loss coverage. This coverage coordinates your no-fault PIP coverage with any health or disability policy you have (except Medicaid, Medicare or a Medicare supplemental policy). If you decide to do that, your health or disability plan becomes the primary payer for medical or wage loss expenses, and the auto policy only covers remaining medical or wage loss expenses. If you are thinking about buying coordinated coverage (not recommended to my clients) for some reason, please note that no-fault coverage is not managed care and you can pick your own doctors. If you elect coordinated care, you have to comply with the guidelines of your health care plan.
PROPERTY PROTECTION INSURANCE (PPI)
No-fault will pay up to $1 million for damage your car does in Michigan to other people's property, such as buildings and fences. It will also pay for damage your car does to otherpeople's properly parked vehicles.
RESIDUAL LIABILITY INSURANCE - BODILY INJURY AND PROPERTY DAMAGE (BI/PD)
The no-fault law protects insured persons from being sued as the result of an auto accident except in the following circumstances:
Unbelievably, the minimum required BI/PD coverage limits in the State of Michigan has not changed for over 20 years and remain only:
While your Michigan lawmakers refuse to stand up to the insurance industry and raise these limits, some Michigan judges and in particular Justices Taylor, Markman, Corrigan and Young on the Michigan Supreme Court are also bowing down to the insurance industry and restricting seriously injured victims of motor vehicle negligence from ever having their day in court to recover these paltry amounts to assist with their disabilities.
Nevertheless, if these cases actually make it to trial, juries may award more than these minimum coverage amounts. If this happens, you are responsible for paying the amount not covered by your policy. To protect yourself, you may wish to purchase extra liability insurance.
OPTIONAL INSURANCE COVERAGES
There are some optional insurance coverages you may wish to consider which are not required under Michigan law.
For the most part, your no-fault insurance does not pay for repairs to your car if it is damaged in an accident. The only kinds of auto insurance that pay for repairs to your car are collision and comprehensive coverage.
Collision Insurance
This coverage pays for repairs to your car when it is damaged in a crash. There are three basic kinds of collision insurance to choose from: broad form, standard, and limited. Collision insurance is usually sold with a deductible which is the money you agree to pay toward the cost of repairs before the insurance company steps in and pays the rest. The larger the deductible, the lower the cost of your collision insurance. Broad Form collision pays for damages regardless of fault, with a deductible that applies only if you are substantially at fault. Standard collision pays for damages regardless of fault, with a deductible that always applies. Limited collision pays only if you are not substantially at fault, and may or may not have a deductible.
Comprehensive Insurance
This coverage pays for your car if it is stolen or for repairs if it is damaged by a falling object, fire, flood, vandalism, or collision with an animal.
Uninsured Motorists / Underinsured Coverage (UM / UIM)
Uninsured Motorist coverage kicks in if an uninsured motorist seriously injures you or a member of your family. Underinsured coverage pays you the difference between the amount of Underinsurance coverage you have and the amount of BI/PD insurance the negligent driver had at the time of the accident. Beware, these coverages must be purchased in an amount over and above the amount of BI/PD coverage you have. Since insurance companies are sneaking clauses into their policies severely limiting their liability for these types of claims despite the amount of coverage you have purchased, it is very important you read the policy closely to make sure you actually have the coverage you think you have purchased.
PIP - PERSONAL INJURY PROTECTION
If you are hurt in an auto accident, this part of your no-fault policy will pay all of your medical costs, including mileage to and from your medical providers. It will also pay 85% of your wages, up to a maximum amount ($4293 per month in 2005), for the wages you would have earned if you had not been hurt. This coverage only lasts for up to three years however.
If you are seriously injured, you may also collect attendant care benefits, paid at an hourly rate, which are practical nursing services performed by untrained medical personnel. These services can include serving meals, transporting to appointments, bathing, administering medication and assisting with various therapies. No-fault insurance also provides up to $20 per day in replacement services which pays for services you are no longer able to provide for yourself or your family because you are injured, such as housekeeping and yard work.
If you are killed in an accident, your policy will pay your family up to the maximum monthly amount for three years, based on what they would have received from your earnings and fringe benefits.
Often, the insurance company will try and sell coordinated coverage or what is called excess medical or wage loss coverage. This coverage coordinates your no-fault PIP coverage with any health or disability policy you have (except Medicaid, Medicare or a Medicare supplemental policy). If you decide to do that, your health or disability plan becomes the primary payer for medical or wage loss expenses, and the auto policy only covers remaining medical or wage loss expenses. If you are thinking about buying coordinated coverage (not recommended to my clients) for some reason, please note that no-fault coverage is not managed care and you can pick your own doctors. If you elect coordinated care, you have to comply with the guidelines of your health care plan.
PROPERTY PROTECTION INSURANCE (PPI)
No-fault will pay up to $1 million for damage your car does in Michigan to other people's property, such as buildings and fences. It will also pay for damage your car does to otherpeople's properly parked vehicles.
RESIDUAL LIABILITY INSURANCE - BODILY INJURY AND PROPERTY DAMAGE (BI/PD)
The no-fault law protects insured persons from being sued as the result of an auto accident except in the following circumstances:
- If you cause an accident in Michigan inwhich someone is killed or seriouslyinjured.
- If you are involved in an accident inMichigan with a non-resident who is an occupant of a motor vehicle not registered in Michigan.
- If you are involved in an accident in a state other than Michigan.
- For up to $500 in damages to another person's car, which is not covered by insurance, if you are 50% or more at fault in the accident.
Unbelievably, the minimum required BI/PD coverage limits in the State of Michigan has not changed for over 20 years and remain only:
- Up to $20,000 for a person who is hurt or killed in an accident.
- Up to $40,000 for each accident if several people are hurt or killed.
- Up to $10,000 for property damage in another state.
While your Michigan lawmakers refuse to stand up to the insurance industry and raise these limits, some Michigan judges and in particular Justices Taylor, Markman, Corrigan and Young on the Michigan Supreme Court are also bowing down to the insurance industry and restricting seriously injured victims of motor vehicle negligence from ever having their day in court to recover these paltry amounts to assist with their disabilities.
Nevertheless, if these cases actually make it to trial, juries may award more than these minimum coverage amounts. If this happens, you are responsible for paying the amount not covered by your policy. To protect yourself, you may wish to purchase extra liability insurance.
OPTIONAL INSURANCE COVERAGES
There are some optional insurance coverages you may wish to consider which are not required under Michigan law.
For the most part, your no-fault insurance does not pay for repairs to your car if it is damaged in an accident. The only kinds of auto insurance that pay for repairs to your car are collision and comprehensive coverage.
Collision Insurance
This coverage pays for repairs to your car when it is damaged in a crash. There are three basic kinds of collision insurance to choose from: broad form, standard, and limited. Collision insurance is usually sold with a deductible which is the money you agree to pay toward the cost of repairs before the insurance company steps in and pays the rest. The larger the deductible, the lower the cost of your collision insurance. Broad Form collision pays for damages regardless of fault, with a deductible that applies only if you are substantially at fault. Standard collision pays for damages regardless of fault, with a deductible that always applies. Limited collision pays only if you are not substantially at fault, and may or may not have a deductible.
Comprehensive Insurance
This coverage pays for your car if it is stolen or for repairs if it is damaged by a falling object, fire, flood, vandalism, or collision with an animal.
Uninsured Motorists / Underinsured Coverage (UM / UIM)
Uninsured Motorist coverage kicks in if an uninsured motorist seriously injures you or a member of your family. Underinsured coverage pays you the difference between the amount of Underinsurance coverage you have and the amount of BI/PD insurance the negligent driver had at the time of the accident. Beware, these coverages must be purchased in an amount over and above the amount of BI/PD coverage you have. Since insurance companies are sneaking clauses into their policies severely limiting their liability for these types of claims despite the amount of coverage you have purchased, it is very important you read the policy closely to make sure you actually have the coverage you think you have purchased.
posted by Neil Davis, Esq. at
2:38 PM
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