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Basic No-Fault Auto Insurance:
Personal Injury Protection (PIP)
This part of your Michigan no-fault policy pays all necessary medical costs if you’re
hurt in an auto accident. It also pays, up to a maximum amount, lost wages for up to 3 years.
What's covered?
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- Medical expenses – If you’re injured in an accident, PIP covers general medical expenses. There’s no limit on payment of medical expenses arising from auto accident-related injuries.
- Lost wages – If you’re unable to work due to accident-related injuries, PIP helps you recover lost wages. The limit on this varies according to your salary, and is limited to 85% of your gross income for 3 years.
- Replacement services – Should you need help performing household duties or other tasks due to accident-related injuries, PIP also helps pay for such necessary services. The limit on this is $20 per day for 3 years.
- Survivors’ payment – This amount varies and is subject to the assessment of the loss suffered by survivors. This payment may additionally cover necessary services required by survivors.
- Funeral expenses – If a covered individual dies from accident-related injuries, PIP helps pay for related funeral expenses. The limit for funeral expenses is $1,750 per person.
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PIP provides protection to the policyholder, spouse, resident relatives, and passengers in the insured vehicle.
Excess Medical/Wage Loss
If no-fault benefits are combined with health or disability coverage, it is
referred to as "excess medical/wage loss." This combination can reduce your
Michigan auto insurance premium. However, some healthcare providers have
restrictions on coordinating no-fault benefits with auto insurance. For example,
Medicaid, Medicare, and some self-funded plans do not allow you to coordinate
with your PIP coverage.
Medical coverage
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- Primary medical: Your no-fault PIP coverage is the primary coverage for your medical expenses.
OR
- Excess medical: You elect to coordinate your PIP coverage with your health insurance. Your no-fault PIP coverage is secondary to your health insurance. A $300 deductible applies per accident when excess medical is selected.
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Work Loss Coverage
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- Primary work loss: Loss of income is covered primarily by your PIP coverage.
OR
- Excess work loss: Your policy covers excess expenses beyond what your accident or disability coverage pays out for loss of income benefits. A $300 deductible applies per accident when excess work loss is selected.
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Work Loss Waiver
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- Accepting the work loss waiver indicates that you're at least 60 years old and not eligible to collect work loss benefits.
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Property Protection Insurance (PPI)
This no-fault coverage pays up to $1 million for car accident-related property damage
to other people’s property such as buildings and fences. It will also pay for damages
your car does to other people’s properly parked cars.
Residual Bodily Injury and Property Damage
Although the no-fault laws protect you from being sued in most situations, there are
certain exceptions. These coverages pay for defense costs and any damages you are
responsible for as a result of an accident, up to the limits of your policy. The
following are the circumstances under which you might use this coverage:
- You cause an accident in Michigan in which someone is killed, seriously injured, or permanently disfigured
- You’re involved in an accident in Michigan with a non-resident who is an occupant of a motor vehicle not registered in Michigan
- You’re involved in an accident in another state
- You intentionally cause harm to someone
These coverages are intended to pay for property damage or injuries caused to a third
party when you’re deemed legally responsible for an accident.
How much protection does this coverage provide?
The minimum limits required are $20,000/$40,000 for bodily injury and $10,000 for property
damage. These limits, often referred to as 20/40/10, provide a maximum coverage of $20,000
for a person injured by you in an accident and a total of $40,000 per accident. The limit
for property damage is $10,000 per accident.
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