No Fault Insurance Act

The No Fault Insurance Act is a Michigan state law that makes it a no-fault state regarding auto accidents. Many other states have passed similar laws, but not necessarily under the same name.

  1. How It Works

    • The No Fault Act specifies that all drivers must have insurance. It also specifies that these insurance policies will pay out to everyone involved in an accident, regardless of who was at fault.

    Why?

    • The reason for no-fault insurance is to reduce lawsuits between drivers. By making everyone get insurance, the money pool is larger, and by requiring both insurance companies to pay out, everyone is quickly and efficiently compensated.

    Exceptions

    • There are some exceptions to the No Fault Insurance Act. The "big three" are if the auto accident causes death, permanent disfigurement, or serious impairment, like a disability. In these circumstances, it is acceptable to sue the other party in an accident for more compensation.

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