No Fault Automobile Insurance in Michigan
The State of Michigan has put out a helpful guide explaining exactly what is meant by “no-fault” insurance, and what determines the rates. The publication can be found on www.michigan.gov web site. The guide is called “A Consumers Guide to No-Fault Automobile Insurance in Michigan”. Below are some of the highlights that may answer your questions.
The Michigan no-fault system was adopted in 1973 to increase the level of benefits paid to injured persons, make sure such payments are made promptly, and reduce the proportion of premium dollars paid out for legal and administrative costs. A Michigan no-fault policy provides unlimited medical and rehabilitation benefits. It provides wage loss benefits for up to three years, and $20 per day for replacement services if you are injured in an auto accident, regardless of fault. In exchange for these benefits, Michigan motorists gave up the right to sue in auto accidents except when someone is killed or very seriously injured. Because of this, disputes over who was at-fault in an accident will not hold up payment of medical bills. Michigan is unique in that damage to vehicles also falls under the no-fault system. This, too, saves time and money in claims payment. Michigan drivers must buy collision and/or comprehensive insurance to cover damage to their own car.
The Michigan Catastrophic Claim Association (MCCA) was established in 1978. The MCCA pays for claims paid by an insurer that exceed a certain amount. All insurers that sell auto insurance in Michigan must pay the MCCA an annual fee for each vehicle insured. That fee is known as the MCCA assessment, and is passed on in whole or in part to the policyholders.
What the Law Requires
Michigan law requires no-fault insurance. Every registered car must be insured. Every car owner must buy basic coverage in order to get license plates. It is a misdemeanor to drive or let your car be driven without basic no-fault coverage. If you are convicted of driving without basic no fault insurance coverage, you may be fined up to$500, put in jail for up to one year, or both. You may also incur additional fines and costs pursuant to the 2003 Michigan’s Driver Responsibility Law. For details please go to www.mi.gov/driverresponsibility If you are unable to produce proof of insurance when requested to do so by a law enforcement official, you may be found guilty of a civil infraction. The court may order your license suspended for at least 30 days or until you are able to provide such proof. You may have to prove you purchased a pre-paid non-cancelable insurance policy before you may renew your vehicle’s registration.
What Happens If You Drive Without Insurance and Have An Accident
If you own a car without no-fault insurance and have an accident: You can be sued and held personally liable. You may have to pay a lawyer and court costs. If you are hurt in an accident involving a vehicle you own that is not insured, you would not be paid for medical expenses, wage loss, loss of services, or any other no-fault benefits.
Why Your Insurance Costs What It Does
Your insurance cost depends on many things. At least annually, your insurance company must explain the specific rating classifications used to calculate your premium. Check to make certain the rating information is accurate. Your rate is based on:
Your Driving Record and Insurance History Under Michigan law, an insurance company must accept an applicant at regular rates unless he or she fails to meet specific eligibility requirements as described earlier in this guide. Some factors affecting eligibility are traffic and drunk driving convictions, as well as substantially (more than 50%) at-fault accidents. Your Age or Length of Driving Experience Insurance companies can no longer rate drivers based on gender or marital status. However, age or length of driving experience still affects the cost of auto insurance. Young drivers will pay more than those considered to be adults. Companies set different ages when drivers are considered adults: A 23-year-old may be an adult with one company and a youthful driver with another company. Where You Live Insurance costs are partially based on where you live. Insurance companies have found that more accidents are likely to occur in some parts of the state than others, and it costs more to settle claims in some places. Income. Because no-fault insurance pays for wages lost due to an automobile accident, some companies charge less if a person’s income is below a certain amount. If you are over 60 years old, you may waive part of your wage loss coverage if you have no earned income.
People use their cars for different purposes. Some drive to work, others drive only for pleasure. The less you drive, the less you may be charged for insurance
Kind of Car
Certain cars cost more to repair or to replace, so collision and comprehensive insurance costs more. Also, some companies charge extra for insuring sports cars or high performance models.
If you have been involved in a auto accident in Michigan, and would like more information, or help determining if you have a case, please call the Law Offices of William Biebuyck PLLC, toll free at 855-U GOT DENIED (846-8336).