The state of Michigan has one of the most comprehensive no-fault car insurance systems in the country and in order to maintain registration in the state vehicles must continuously be insured. Motorists in MI must purchase quite an extensive policy in order to be in compliance with the laws of the state. Individuals who own a vehicle and operate it or allow others to do so without proper coverage can be held accountable for any damages resulting from a traffic accident and be subject to a lawsuit. In addition, if convicted of driving uninsured it may result in a misdemeanor and a fine ranging from $200 to $500, or sentenced to jail for up to one year or both.
The Michigan auto insurance laws requires that all motorists must purchase Personal Injury Protection (PIP), Property Protection (PPI), Residual Bodily Injury and Property Damage Liability (BI/PD) in order to receive vehicle license plates. The main goal behind this comprehensive no-fault system is to help ensure that every motorist, their family members and passengers have compensation in place regardless of fault; the no fault laws are also designed to protect insured individuals from being sued unless under certain special situations. No-fault policies will also cover family members if they are passengers in another person’s automobile or are injured as pedestrians while a traffic accident occurs. In addition, it will also cover pedestrians and motorcyclists who are injured in an accident involving the insured’s vehicle.
When a personal injury protection policy is purchased it provides the policyholder and family members with an unlimited amount of medical and rehabilitation benefits, limited wage loss benefits and $20 per day for replacement services for up to three years if injured as a result of a traffic accident. Wage loss will be provided at 85% of income that would have been earned had they not been injured for three years; effective 10/01/09, the maximum compensation per month is $4,878 which is revised annually. If the insured is killed in an accident, their family will receive these benefits for the three years. Replacement services will pay for a service up to $20 per day that the injured is no longer able to provide such as yard work and housekeeping.
According to the Michigan Department of Energy, Labor & Economic Growth, the required property protection (PPI) limit is $1 million and will pay for damage that that the policyholder’s vehicle causes in MI to another person’s property such as building and fences; it will also pay for damage caused to another party’s properly parked automobile, but does not pay for any other damage to cars (motorists can be sued for up to $500 for damages that they cause to vehicles if they are found to be more than 50% at fault for causing the accident). Residual bodily injury and property damage liability will pay for defense costs and any damages that the insured is found responsible for causing up to the policy limits. The minimum required limits are $20,000 for the injury or death of one person, $40,000 for the injury or death per accident and $10,000 for property damage caused in another state; commonly abbreviated as 20/40/10. Having to purchase such extensive coverage can become quite expensive, individuals should take the time and compare the rates of as many companies as possible to help locate the most affordable policy.
