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Michigan No Fault Motorcycle Insurance Explained

Our Brief Explanation of Michigan No-Fault Insurance

Unlike many states in the union, Michigan has what’s called “no-fault” insurance laws on the books, and those laws are currently being eyed for revision.

What is no-fault, well, we’re here to help you navigate your way through the law and figure out where you stand when you buy a motorcycle insurance policy in The Great Lakes State, so strap on your helmet, put on a pair of good riding gloves, and remember, there’s more to riding a motorcycle than “one down, four up.”

NO-FAULT INSURANCE is required by law in Michigan.

Every owner of a car must buy certain basic coverages in order to get license plates. It is against the law to drive or let your vehicle be driven without no-fault insurance.
If you have an auto accident, no-fault insurance pays for your medical and wage loss and the damage you do to other people’s property. It does not matter who caused the accident.
Your basic no-fault insurance does NOT pay for repairs to your vehicle.

The Basic No-Fault Policy You Must Buy Has Three Parts:
1. Personal Injury Protection
If you are hurt in an auto accident, this part of your no-fault policy will pay all of your medical costs. It will also pay up to 85% of the income you would have earned if you had not been hurt, for up to three years. However, the amount that you would be paid for lost income is limited and the limit is revised annually. Effective 10/1/10, the maximum is $4,929 per month. If you are killed in an accident, your policy will pay your family up to $4,929 per month for three years, depending upon what they would have received from your earnings and fringe benefits. In addition, you are entitled to $20 per day in replacement services. This is to pay for services which injured persons are no longer able to provide for themselves or their families, such as housekeeping and yard work.

2. Property Protection
No-fault will pay up to $1 million for damage your car does in Michigan to other people’s property, such as buildings and fences. It will also pay for damage your car does to another person’s properly parked vehicle. It does not pay for any other damage to cars.

3. Residual Liability Insurance – Bodily Injury and Property Damage
The no-fault law protects insured persons from being sued as a result of an auto accident except in certain special situations. In general, you can only be sued:
if you cause an accident in Michigan in which someone is killed, seriously injured, or permanently disfigured;
if you are involved in an accident in Michigan with a non-resident who is an occupant of a motor vehicle not registered in Michigan;
if you are involved in an accident in another state; or
(d) for up to $500 if you are 50% or more at fault in an accident which causes damages to another person’s car which are not covered by insurance.
Your required minimum coverage no-fault policy will pay up to certain amounts if you are found legally responsible.

Although you may purchase additional coverage with higher limits, the minimum coverage offers:

Up to $20,000 for a person who is hurt or killed in an accident,

Up to $40,000 for each accident if several people are hurt or killed.

Up to $10,000 for property damage in another state.

A No-Fault Policy Covers The Whole Family

A no-fault policy covers all family members living in the same house. Personal injury protection benefits will be paid even when a family member is a passenger in another person’s car or is a pedestrian when an accident takes place. The personal injury protection coverage of your no-fault policy also covers anyone who does not have a no-fault policy and is hurt as a passenger or pedestrian in an accident involving your car. It will also cover a motorcyclist who is hurt in an accident involving your car.
This is only a brief summary of no-fault insurance. Some of the details have been left out. For more information read your policy, talk to your agent, or contact the Office of Financial and Insurance Regulation (OFIR) for any additional publications on this topic.

Insurance You May Want To Buy:

There are several types of coverage that you can choose to buy in addition to the required no-fault insurance. Three of the most common types of extra insurance are described on this page.

1. Collision and Comprehensive Insurance
Your no-fault insurance DOES NOT pay for repairs to your car if it is damaged in an accident. If your car is properly parked and hit by another car, the other driver’s no-fault coverage will pay for the damage to your car. Except for this one situation, the only kinds of auto insurance that will pay for repairs to your car are collision and comprehensive coverage.
Collision coverage pays for repairs to your car when it is damaged in a crash. There are three basic kinds of collision insurance to choose from – limited, standard and broad form. The chart on the next page describes each type and what it covers. The deductible mentioned in the chart is the amount of money you agree to pay toward the cost of repairs before the insurance company steps in and pays the remainder. The larger the deductible, the lower the cost of your collision insurance.
B. Comprehensive insurance pays for your car if it is stolen or for repairs if it is hit by a falling object, collides with an animal, or is damaged in a fire, flood or by vandals.
If you have an older car, you may not want collision and comprehensive coverage. If your car is financed, the company that loans you the money may require that you buy collision and comprehensive coverage.

2. Residual Liability Insurance – Increased Limits
You may be sued because of an accident, as was discussed in the section on residual liability insurance. If this happens, your no-fault policy will pay up to the amounts shown in the residual liability section.
However, courts sometimes award more than these amounts. If this happens, you would be responsible for paying the amount not covered by your insurance policy. To protect themselves, many people buy higher limits of liability insurance.

3. Limited Property Damage Liability Insurance – “Mini-Tort”
Most companies offer coverage for the $500 liability mentioned in (d) in the section on residual liability insurance.

What To Do If You Have A Question Or A Problem:

If you have an insurance question or problem, call your insurance agent or company. If your questions are not answered, contact OFIR at the address or telephone number below. OFIR is the state agency that regulates insurance in Michigan.

The Three Types of Collision Coverage

Michigan law requires you to have no-fault automobile insurance on your car. If you have an accident, this required insurance pays for injuries to people and for damages your car does to other people’s property and to properly parked cars. IT DOES NOT PAY FOR ANY OTHER DAMAGE TO CARS. You must buy collision coverage if you want coverage for damage to your car in case of an accident. The other drivers’ insurance will not pay for damage to your car.

There are three kinds of collision insurance you can choose from: limited, standard, and broad form. The chart tells you when each kind of insurance will pay YOU if your car is damaged in an accident. Your collision coverage will not cover damage to the other driver’s car.


Nature of Accident

If your vehicle is damaged in an accident and you have this kind of collision coverage.
You are MORE THAN 50% at fault (you hit a tree, a person, another vehicle, etc.)
You are 50% OR LESS at fault (you are rear-ended, side-swiped, etc.)

No Collision Coverage
Your insurance pays nothing. You are responsible for the cost of repairs to your car.
Your insurance pays nothing. You are responsible for the cost of repairs to your car.*

Limited Collision Coverage
Your insurance pays nothing. You are responsible for the cost of repairs to your car.
Your insurance pays. If you have chosen a deductible, your insurance pays the cost of repairs over and above the deductible. You must pay the deductible.

Standard Collision Coverage
Your insurance pays, except the deductible that you have chosen. You must pay the deductible.
Broad Form Collision Coverage
Your insurance pays, except the deductible that you have chosen. You must pay the deductible.
Your insurance pays. You do not have to pay the deductible.

* You may be able to collect up to $500 from the other driver under the “mini-tort” provision of the no-fault law. For more information, see the Insurance Counselor on mini-tort.

Office of Financial and Insurance Regulation
PO Box 30220 Lansing, MI
Toll Free

Whether you ride a sport bike or an American cruiser, your insurance needs can get complicated.

We’re here to help you find the right motorcycle insurance, whatever you ride…

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