What is No Fault Insurance?

What does No-Fault Insurance Mean?

No-Fault is an auto insurance system in Michigan and 12 other states.  No-Fault is a form of insurance where individuals who are injured in an auto-related accident receive benefits from their own auto insurance company, regardless of who is at fault.  Most states require an injured person to seek recovery from an at-fault driver, while Michigan auto insurance provides prompt payment by allowing injured parties to recover directly from their own insurance company.

The benefit of a no-fault system is prompt payment of claims without having to file a lawsuit for most financial losses.  You can sue in Michigan, however, for pain and suffering and excess economic losses in accidents involving death, serious impairment of body function or serious disfigurement. 

In Michigan, drivers are required to purchase insurance.Driving without insurance  is a misdemeanor punishable by up to one year in jail and a fine of $200 to $500, plus court costs. Guilty parties are also subject to a driver responsibility fee of $500 per year for two years.

Since Michigan is a no-fault state, if you are driving your vehicle without insurance and are injured, you will not receive any auto insurance benefits, even if the other driver is at fault.