Types of Coverage

Under the Michigan no-fault law, which was effective October 1, 1973, all auto owners are required to purchase personal injury protection coverage, property protection insurance, and residual liability coverage. Personal injury protection insurance provides the most comprehensive first-party benefits of any no-fault law. It covers medical and rehabilitation expenses without limitation and provides a maximum of three years of coverage for wage loss and survivor benefits. The law limits tort liability to economic losses in excess of personal injury protection benefit limits and provides for tort liability for noneconomic losses only if a verbal threshold is satisfied. The restriction on tort claims for noneconomic loss historically has been the most effective in the nation.

Property protection insurance provides up to $1 million in coverage for property damage by the insured on a no-fault basis. It does not cover the insured's property or damage to autos unless legally parked at the time of the accident. In contrast to almost all other states with no-fault, Michigan's no-fault law limits tort liability for property damage to other autos. Until July 1, 1980, tort liability was completely eliminated. In 1980, drivers became subject to tort liability for up to $400 in damage to other vehicles if the loss was not covered by insurance. A driver who is more than 50 percent at-fault cannot recover under this "mini-tort" provision. Residual liability coverage is required to be purchased with minimum limits of $20,000 per person and $40,000 per occurrence for bodily injury and $10,000 per occurrence for property damage. [1]

Auto owners have the option of purchasing comprehensive coverage for theft and damage other than collision and either standard, broad, or limited collision coverage. [2] The purchase of uninsured and underinsured motorists coverage also is optional.