Michigan Lawyer Aaron Larson

"Third Party" No Fault Law - Michigan Car Accidents and Personal Injury Lawsuits

Important Notice

The following information is a summary of Michigan No Fault law. It is not intended to cover every aspect of No Fault Law, and it may not reflect the latest changes in the law. If you believe you have a claim under Michigan's No Fault law, please have your claim reviewed by a qualified attorney.

Before you start thinking about a lawsuit against the driver or drivers who caused the accident in which you were injured, please recall that the most important consideration is your own health and recovery. Do not neglect yourself. Seek the medical care and rehabilitation to which you are entitled.


How "No Fault" Works

Michigan's "No Fault" statute was designed to limit litigation, by shifting the risk of certain losses from automobile accidents to the owner of the vehicle. For example, beyond Michigan's "mini-tort" law, you are responsible to insure your own vehicle and its contents against damage in an accident. If you choose not to insure your vehicle for collision damage, even if you are 100% innocent of blame in an accident, if the other driver is properly insured your ability to recover from the other driver for property damage is limited to a few hundred dollars under the mini-tort statute, MCL 500.3135(3)(e). (This is why the statute is called a "No Fault" statute – you are responsible for certain costs regardless of who is at fault.)

Similarly, the cost of your medical care, lost wages (ordinarily, awarded in the amount of 85% of your pre-accident gross wages), and rehabilitation will ordinarily be paid by your own no fault policy, or that of the owner of the car in which you were riding – although "excess" wage losses (those beyond the limits of your "first party" coverage) may be part of your claim against the driver (or drivers) who caused the accident. In short, most of your economic losses (out-of-pocket expenses) will be paid by your own insurance company, while you can file a lawsuit against the driver(s) who caused the accident for non-economic losses (pain and suffering) and excess economic loss.

You will probably not be able to file a lawsuit against the other driver if:

  • You are more than 50% at fault for the accident;
  • You owned the vehicle in which you were riding, and did not carry a valid policy of insurance at the time of the accident.

In relation to the obligation to insure your car, please note that if you are not a resident of Michigan and are driving a car that is registered in another state, you must carry Michigan no fault insurance (or equivalent coverage) if the car is operated in operated in Michigan for more than thirty days in any calendar year.

Please note that you should not depend upon anybody's assessment of who was at fault for an accident, including the officer or police agency who drafts a report about the accident. The fact that an officer indicates that you are at fault, or even that the officer issues you a ticket, does not necessarily mean that you will be unable to file a lawsuit. An attorney can help you assess your right to sue.

The amount which you are able to recover may be reduced if you were partially at fault for the accident. Your damages may also be reduced by an amount up to five percent, if you were not wearing a seatbelt at the time you were injured.

"Serious Impairment of a Body Function"

As part of its effort to limit lawsuits over injuries caused in automobile accidents, recovery for "pain and suffering" (non-economic damages) for accident-related injuries is limited to cases where the person making the claim suffered death, serious impairment of an important body function, or permanent serious disfigurement. The injury must also be "objectively manifested" – that is, some soft tissue injuries cannot support a lawsuit, as doctors will not be able to find any objective evidence that the injury exists. (This doesn't mean that the injury doesn't exist, or that the accident victim doesn't suffer very real pain or disability – it means only that, under Michigan law, not all injuries will support a lawsuit.) Typically, medical findings of muscle spasm and trigger points will be considered to be objective manifestations of an injury.

A "serious impairment of body function" is an injury that affects your ability to live a normal life. This can include an impairment of your ability to walk, or to engage in more basic functions such as breathing. This standard also contemplates your normal life – if you are a concert pianist, you may be able to recover damages for an injury to your hand which impairs your ability to play the piano, even though the injury might not meet the threshold for recovery for a person whose daily life does not require a comparable level of dexterity. The duration of the disability may affect a court's determination of whether the impairment was serious, or its effect on your normal life. Given two people with the same injury, a very active person may be able to show a threshold impairment, while a "couch potato" may not be able to establish that his life was significantly affected by the injury. Closed head injuries are subject to special rules. Ordinarily, you should not try to guess for yourself if your injuries meet this threshold, but should only make the assessment in consultation with a lawyer.

This "threshold" rule does not apply to claims for economic damages, such as a claim for excess wage losses.

Claims Against Your Recovery

If any of your medical expenses relating to the accident have been paid by a government agency, such as Medicare or Medicaid, or even workers' compensation, the government may have the right to recover those expenses from any amount you recover in your lawsuit. Similarly, if you have medical expenses relating to your accident which have not been paid by your insurance company, the medical care provider may be able to assert a claim against your recovery. Please inform your attorney of any such payments or obligations. Given advance notice, your attorney will probably be able to negotiate a settlement which will maximize the amount of money you personally recover. However, if your attorney is surprised, it may turn out that a substantial amount of your settlement or verdict – and perhaps all of it – is paid to satisfy those liens.

Uninsured and Underinsured Defendants

In some cases, the driver of the car which causes the accident won't be insured, or will have an inadequate amount of insurance. Michigan no fault policies will offer a certain amount of "uninsured motorist" coverage, which will entitle you to make a claim for your pain and suffering with your own insurance company. Some insurance providers also allow you to obtain "underinsured motorist" coverage, which will allow you to recover an additional amount if the other driver has inadequate coverage to reimburse you for your non-economic and excess economic losses. Please note that there are usually very technical requirements for making underinsurance claims which, if violated, may prevent you from recovering benefits. You should read your policy carefully, and may benefit from an attorney's advice in making such a claim.

Finding All Responsible Parties

In some cases, there will be people who may be sued beyond the at-fault driver. For example, if the at-fault driver did not own the car, the owner of the car will typically also be liable for your damages. If the at-fault driver was impaired through the consumption of alcohol, it may be possible to bring a "dram shop" complaint against a business who served alcohol to the driver before the accident while he was visibly impaired. In some cases, it may be possible to bring an action alleging that a defect in the vehicle or the roadway caused or contributed to the accident. In cases involving a tractor-trailer, there may be violations of rules and regulations by the driver or the driver's employer, which can support a cause of action.

Statute of Limitations

Note that, as of the time this was written, there is a three year statute of limitations for personal injury claims against the at-fault driver(s). A highway defect claim must ordinarily be filed within two years of the accident. A dram shop claim ordinarily requires that notice be given to any tavern which may be at fault within 120 days of the accident, and that a lawsuit be filed within two years. If you are considering making a claim, you should consult with a lawyer as soon as possible after the accident, so as to avoid having your claim barred by the statute of limitations, and to avoid the possibility that you will miss your opportunity to file a claim should the legislature shorten the limitations period.


The information contained in this web site is provided as a public service. While the information on this site is about legal issues, it is not legal advice or legal representation and should not be relied upon as legal advice. Because of the rapidly changing nature of the law, we make no warranty or guarantee of the accuracy or reliability of information contained herein or at other sites to which we link. As legal advice must be tailored to the specific facts and circumstances of your case, information cannot substitute for the advice of competent legal counsel.

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Mr. Larson does not seek clients from outside of the state of Michigan. If you require legal advice, please contact an attorney licensed to practice in your state. We will be happy to assist you, if possible.