No-fault car insurance gained popularity in the 70s and 80s. In Michigan, no-fault’s purpose was designed to reduce the amount of time that it took to receive compensation. When accidents occur under no-fault insurance, it means that regardless of who causes the accident, injured parties will make a claim against their own insurance company to cover necessary costs. This reduces the need to sue the other driver for compensation. The time it takes to develop a case, set a court date, go to court, argue your case, and wait for a ruling is gone under no-fault insurance. Of course in more serious accidents, where death or dismemberment may occur, the ability to sue is not completely taken away.
No-fault insurance requires that drivers carry PIP (personal injury protection) insurance. This means that should an accident occur that requires medical care; the driver will have medical insurance to cover the costs. Additionally, PIP includes disability insurance. While most individuals have medical insurance less than half of drivers have some form of short-term disability coverage. If an accident occurs that requires the individual to take an extended time off of work, the disability coverage would kick in and covers some of the lost wages.
One way that distinguishes Michigan from other states, which require no-fault insurance, is that Michigan offers no limit to compensation. If the injured party or surviving family members are eligible, then they can receive benefits for the remainder of their lifetimes. Another way that Michigan distinguishes itself from the other states that require no-fault insurance is that Michigan drivers pay higher premiums for their insurance that most other states. There have been various reform measures that have been discussed to change the way people are billed for driver’s insurance in Michigan, but so far no resolutions have passed.
While most drivers do not have issues with the level of coverage that no-fault insurance brings, the price of the premiums is a sore spot. A benefit for the people as a whole is that reducing or taking away the need to sue other driver’s for compensation for minor injuries means that when catastrophic injury, illness or loss occurs, it can be handled in the courts in a timely manner. This means that compensation can be paid quicker and treatment can be completed faster.
Michigan’s no fault insurance is a way to reduce the amount of time that an injured party needs to wait before they begin treatment and recovery.
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