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What Car Accident Compensation Am I Entitled To?

Legally Reviewed and Edited by: Terry Cochran

The cost of getting into a car accident can be financially and physically substantial. Victims of a car accident can face fees ranging from $100 for a minor fender bender to replacing the entire vehicle if it’s totaled. Physically, victims can be left with severe injuries such as brain damage and broken bones that affect their quality of life, as well as medical bills and possible loss of wages.

While car insurance can protect you against financial loss, it’s not always clear what kind of compensation you can receive after a car accident in Michigan. As a no-fault state, both drivers in a car accident are entitled to compensation from their car insurance companies, no matter the cause of the accident.

But, Michigan’s no-fault laws can be complicated because of additional policies, such as worker’s compensation, unemployment benefits, and different insurance policies. That’s why it’s best to contact an attorney with experience in car accidents involving no-fault insurance.

What is Michigan’s No-Fault Law?

Most states in the U.S. use an at-fault system to determine settlements in car accidents, which means each party’s insurance company reviews the information to determine who is at fault. If it’s clear that one driver is at fault, their insurance coverage will pay for property damage, medical bills, and sometimes additional compensation.

Michigan, however, uses a no-fault system. In no-fault states, fault doesn’t need to be determined to receive compensation for injury claims. However, in no-fault states, you must purchase personal injury protection or PIP. The PIP is what pays for the medical bills or loss of wages up to their policy limits, regardless of who caused the accident.

Types of Michigan Car Insurance

Since Michigan is a no-fault state, all drivers must obtain certain types of auto insurance to protect themselves against liability on the road. If you get into an accident and don’t have the necessary insurance policies, you’re not only responsible for the costs of the other party’s injuries; you could face a $500 fine and a year in prison.

What Insurance is Necessary?

Michigan requires all of its drivers to maintain no-fault auto insurance. Without insurance, drivers could face a $500 fine and suspension of their license for 30 days or until they can prove insurance coverage. Michigan requires you to have three components for your auto coverage:

  • Personal injury protection (PIP). This covers personal injury costs, like medical treatment and lost wages. You must carry a minimum of $50,000 in PIP insurance.
  • Property protection insurance (PPI). PPI handles damage to personal property, such as buildings, fences, or properly parked cars, but not other moving vehicles.
  • Residual liability insurance (bodily injury and property damage). Residual Liability insurance extends the financial protections afforded by no-fault insurance. While Michigan’s no-fault law protects drivers from being sued because of an accident, there may be times when it is possible to be found legally responsible. Residual liability insurance helps to cover those instances.

The exceptions are:

  • You are in an accident in another state.
  • You are in an accident in Michigan with an out-of-state resident driving an out-of-state vehicle.
  • You cause an accident in which someone is permanently disfigured, seriously injured, or killed.
  • You are at fault for an accident causing damages to another car without insurance.

What Insurance is Optional?

Most Michigan insurance companies provide optional add-on policies that cover extra expenses. These additional coverages include:

  • Collision coverage. It covers damage to your car caused by an accident.
  • Comprehensive coverage. It covers motor vehicle damage from collisions with animals, damage from disasters like fire or flooding, or theft.
  • Limited property liability insurance. Also called mini-tort insurance and covers up to $3,000 in damages to another driver’s car.
  • Towing and rental car coverage. This covers the fees of towing a damaged vehicle and receiving a rental vehicle.

If you purchase these policies, you are generally entitled to compensation for the respective damages. Otherwise, your insurance company is not always obligated to pay them, and you aren’t always able to sue the other driver to recover the costs.

What Compensation Am I Always Entitled to in Michigan?

If you have all three forms of insurance required under Michigan law, your car insurance company should reimburse you for costs covered under your policies. While specific coverage amounts vary by policy limits, most companies cover similar expenses, including:

Medical Expenses

Your PIP covers medical bills and accident-related healthcare costs, like the cost of a medical attendant, after a car accident. The coverage amount depends on your insurance policy. Unlimited coverage is expected to cover all of your medical expenses, no matter how much they cost. While coverage for $250,000 per person per accident will cover only up to $250,000 in medical expenses, you will be expected to cover the rest.

Lost Wages

An injury from a car accident can leave you unable to work. If a car accident causes severe enough injury that you can’t return to work until you heal, your PIP can reimburse you for the lost earnings for up to three years.

Property Damage

Not all car accidents involve multiple cars. PPI is designed to cover the cost of property damage resulting from a car accident. For example, if someone drove onto your property and struck a fence, their insurance would reimburse you for the cost of repairing the fence.

However, compensation for property damage does not include your car. The only exception to this rule is if you’ve parked your car in an appropriate parking space and another driver hits it. Your car would then be covered under PPI, but damage from a car crash or accident would be covered under collision or comprehensive insurance.

Car Accident Injury. Back Pain While Driving

What Can I File a Claim For?

In some cases, your insurance does not cover the damages you suffer in a car accident. In that case, you may be able to file a claim against the other driver or your insurance company.

Vehicle Damage Under $3,000

Most of the time, you cannot sue another driver to cover damages to your vehicle. However, Michigan law makes an exception for small claims intended to cover your insurance deductible under limited property damage liability, also called mini-tort.
Mini-tort claims are only meant to cover the deductible, up to $3000, and not the actual damage to the car.

Denied Coverage

If your car insurance company doesn’t agree that your injuries or damages are severe enough to require coverage, they may deny your initial claim. However, if your injuries are serious enough that you cannot work, you may be able to file a first-party claim against them to try to get them to cover the cost of medical bills and lost wages.

Insufficient Coverage or Serious Injury

If you don’t have unlimited coverage and incur costly medical bills, you can file a personal injury claim against the other driver to cover your medical treatment. This is known as a third-party claim.

Michigan law also allows you to sue for non-economic damages if the accident caused serious injury or death. For example, if you or a loved one were permanently disabled in the crash, you could sue the other driver for pain and suffering or loss of companionship.

To sue for pain and suffering, you must meet Michigan’s serious injury threshold, which includes permanent disfigurement or permanent or temporary impairment of a body part.

Can Insurance Companies Refuse to Pay?

Generally, insurance companies will pay you the reimbursement you’re owed. However, an insurance company might believe that the amount you’re asking for or the services you’re receiving are unnecessary, causing them to withhold some or all of the compensation.

Michigan allows you to file a complaint with the state’s Department of Insurance and Financial Services if your insurance company doesn’t pay what you’re owed. However, navigating the paperwork and legalese often involved in these processes can be challenging.

Contact an Auto Accident Lawyer Today

You may be entitled to compensation if you’re a car accident victim and sustained bodily injury. To help ease the process along, and get you the compensation you deserve, get in touch with Cochran, Kroll & Associates, PC. We’ll fight for you and take some pain from dealing with laws, insurance companies, and paperwork.

Our contingency fee basis means we only get paid if we win your case, so there is no financial risk to you to get started. Call our law firm today at 1-866-MICH-LAW (1-866-642-4529) and schedule your no-obligation, free case evaluation.

Disclaimer: The information provided is general and not for legal advice. The blogs are not intended to provide legal counsel, and no attorney-client relationship is created nor intended.

Disclaimer : The information provided is general and not for legal advice. The blogs are not intended to provide legal counsel and no attorney-client relationship is created nor intended.

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