Auto Insurance
Michigan's no-fault architecture
Michigan (MCL 500.3101 et seq.) combines first-party personal injury protection (PIP), property protection insurance (PPI), and residual liability. PIP pays accident-related medical costs, wage loss, replacement services, and attendant care regardless of fault. Since the 2019 reform took effect July 1, 2020, insureds select PIP medical limits - unlimited, $500,000, $250,000 (with Medicare/Medicaid conditions), or $50,000 Medicaid-only - and providers are paid under a Medicare-referenced fee schedule rather than billed charges. Minimum liability limits rose to $50,000/$100,000 bodily injury and $10,000 property damage.
What each part does
- PIP: first-party benefits; no tort threshold applies to your own benefits.
- PPI: pays up to $1 million for damage the vehicle causes to others' property.
- Residual liability: pays others when you are at fault; a serious-impairment threshold limits noneconomic tort claims.
- Collision and comprehensive: physical damage to the insured vehicle, subject to a deductible.
- Mini-tort (MCL 500.3135): up to $3,000 of vehicle damage, typically the deductible, recovered from an at-fault driver.
Worked example
An insured with a $1,000 collision deductible is rear-ended by a driver carrying liability coverage. Collision pays the repair less $1,000; the insured then pursues mini-tort recovery of the $1,000 from the at-fault driver's insurer. Meanwhile the insured's own PIP pays the medical bills, reduced to the Medicare fee schedule.
Traps
Applying tort fault concepts to PIP benefits; ignoring the PIP medical limit selected on the declarations page; forgetting the no-fault exclusion for parked vehicles absent limited circumstances; assuming mini-tort is unlimited.