Michigan no-fault

What is Michigan No-Fault Insurance Exceptions

In Michigan, state law requires you to carry No-Fault insurance. All registered vehicles must have the minimum coverages required by law.

Under a no-fault system, your insurance company pays you the damage to your car from an accident, regardless of fault. The other driver will get the damages to repair their car from their own insurance company. Under a no-fault system, you do not have to decide who is at fault to receive payment for your vehicle.

Exception #1 to the Michigan No-Fault Law

You can file a property damage claim against the other person’s insurance company. If the other driver hits your vehicle while it is in a legal parking space.

Exception #2 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 $1000 for damage.  You can make a claim against the other driver’s insurance company, or you can take them to small claims court and get the maximum of your deductible or the cost of damages whichever is higher but not to exceed $1000.

Go the link to find more information on how to file a mini-tort claim.

Exception #3 to the Michigan No-Fault Law

If you drive in Michigan without any insurance and you 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 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 license until the judgment is completely paid.

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 drivers license.  A no photo drivers license that limits you to drive only the vehicles stated on the license.

To get a financial responsibility drivers license.

  • You have to file a partial payment agreement with the Michigan Department of State. ( A partial-payment agreement is an agreement that is the person with the injury signs and the at-fault person who did not have insurance, The uninsured at-fault driver agrees to make payments toward the judgment. It states the amount that is owed when the payments need to be made, and to whom it is to be paid.)
  • You have to purchase financial responsibility insurance. (Financial-responsibility insurance is Michigan no-fault insurance that meets the particular requirements of the financial responsibility situation. There are two types of acceptable insurance:)
  1. Owners, which covers any vehicle registered in the name of the responsible party.
  2. Operators, which insures the responsible party in any vehicle not registered in the party’s name.

You can have either or both of these types of policies, but insurers will surcharge these policies because of the additional reporting that they have to do with the state. The filing is a lengthy process because the application is sent to the home office of the issuing company, and 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 not be valid until the state receives the copy of the certificate of insurance and the partial payment agreement.

Contact No-fault Agent

Finally, for more information on how to start a Michigan No-Fault insurance policy contact a Michigan auto insurance agent or call 248-888-1134.