Michigan No-Fault Exceptions

Three Exceptions to Michigan No-Fault Insurance

Michigan requires No-Fault insurance for all registered vehicles. If you have an accident, your insurance company pays for your car, and the other driver’s company pays for theirs. There is no need to determine fault.

  1. First Exception Michigan No-Fault Law: You can file a property damage claim against the other person’s insurance company. The other driver hits your vehicle while it is legally parked.
  2. Second Exception to Michigan’s No-Fault Law: Under Michigan law, if you are 51% or more at fault, the other driver can sue you for up to $3000 for damage. Make a claim against the other driver’s insurance company or go to small claims court, and you can get the maximum of your deductible or the cost of damages, whichever is higher, but not to exceed $3000. Go to the link for more information on filing a mini-tort claim.
  3. Third Exception to the Michigan No-Fault Law: If you drive in Michigan without insurance and are at fault in an accident, the injured party may file a suit against the uninsured motorist in court for damages. The court may award a judgment (called a Michigan financial responsibility judgment) for damages to the injured party against the uninsured motorist. If the uninsured motorist cannot pay the judgment, the state will suspend your driver’s license until you pay the judgment.

Michigan No-fault Judgements

If you can’t pay your Financial Responsibility Judgement, these are the restrictions that you will face.

  • You could lose your Michigan Drivers License.
  • You will have to apply for a financial responsibility restricted driver’s license—a no-photo driver’s license that limits you to driving only the vehicles stated on the license.

To get a financial responsibility driver’s license.

  • You must file a partial payment agreement with the Michigan Department of State. ( A partial payment agreement is between the person with the injury and the at-fault person without insurance. The uninsured at-fault driver agrees to make payments toward the judgment. The contract states the amount you owe, when the payments are due, and where to make payments.)
  • You have to purchase financial responsibility insurance. (Financial responsibility insurance in Michigan is no-fault insurance that meets the particular requirements of the financial responsibility situation. There are two types of acceptable insurance:)
    1. Owners: This covers any vehicle registered in the responsible party’s name.
    2. Operators: This will provide insurance to the responsible party in any vehicle not registered in the party’s name.

    These two policies are available, but insurers will surcharge the policies because of the additional reporting to the state. The filing is lengthy because the application goes to the issuing company’s home office. Then, they will have to send the certificate of insurance to the State of Michigan. This process may take up to a week to complete. Your restricted license will be valid once the state receives a copy of the certificate of insurance and the partial payment agreement.

Contact Michigan Agent

Finally, for more information on starting a Michigan No-Fault insurance policy, get a Michigan auto insurance quote or call 248-277-4505.