Michigan no-fault

Three Exceptions to Michigan No-Fault Insurance

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 costs 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.

  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 in a 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 $1000 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 $1000. This limit will go to $3000 effective July 2, 2020. Go the link to find more information on how to file a mini-tort claim.
  3. Third Exception 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, your driver’s license will be suspended by the state 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 drivers license.  A no photo driver’s license that limits you to drive only the vehicles stated on the license.

To get a financial responsibility driver’s license.

  • You have to file a partial payment agreement with the Michigan Department of State. ( A partial-payment agreement is an agreement the person with the injury signs with the at-fault person without insurance. The uninsured at-fault driver agrees to make payments toward the judgment. It states the amount that you owe and when the payments are due, and it lists where to make payments.)
  • You have to purchase financial responsibility insurance. (Financial-responsibility insurance in Michigan 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 name of the responsible party.
  2. Operators: This will insure 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 a lengthy process because the application goes 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 a copy of the certificate of insurance and the partial payment agreement.

Contact Michigan 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.