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Under Michigan No-Fault insurance, who pays deductible?

May 1, 2020 by Steven M. Gursten

Under Michigan No-Fault insurance, who pays deductible?

Under Michigan No-Fault insurance, who pays the deductible? It depends on several factors but if you opted for a deductible on your policy for medical and wage loss benefits, then you will pay. Whether you have to pay a deductible on your collision coverage will depend on whether you were at-fault for the car accident.

After a person has been injured in a car accident, the question of deductibles and who pays a deductible inevitably comes soon after. Normally the question of who pays a deductible will arise in three contexts involving Michigan’s auto No-Fault insurance law:

  • Paying for accident-related medical bills through No-Fault coverage
  • Paying to reimburse a car accident victim’s lost wages through No-Fault coverage when the victim’s injuries prevent him or her from returning to work
  • Paying to repair car accident-related vehicle damage through one’s collision coverage

Deductible for No-Fault medical benefits

Under the Michigan No-Fault insurance law, if you chose to have a deductible on your No-Fault coverage for auto-accident-related medical bills, then you will have to pay the deductible – even if you are not at fault and had nothing to do with causing the car accident.

Importantly, in return for agreeing to “a deductible of a specified dollar amount,” your No-Fault auto insurance company must provide “appropriately reduced premium rates.” (MCL 500.3109(3))

Deductible for No-Fault wage loss benefits

If you chose to have a deductible on your No-Fault coverage for lost wages, then you will have to pay even if you had nothing to do with causing the car accident.

However, as with medical benefits, your auto insurer will have to provide a reduced premium.

Under Michigan No Fault Insurance who pays deductible if you are more than 50% at fault?

Under Michigan No-Fault insurance, if you are more than 50% at fault in causing the car accident that resulted in damage to your motor vehicle, then you are the person who pays the deductible if you have broad form or standard collision coverage. The deductible amount is what you chose in your insurance policy.

It’s important to note that if you have limited collision coverage and you’re “more than 50% of the cause for your accident,” then you will have no deductible because your limited collision coverage will not pay for any of your vehicle damage. (MCL 500.3037(1)(a))

Under Michigan No Fault Insurance who pays deductible if you are less than 50% at fault?

Under Michigan No-Fault insurance, if you are less than 50% at fault in causing the car accident that resulted in damage to your motor vehicle, then you will NOT have to pay a deductible if you have the broad form or limited collision coverage. The deductible is waived if you are not “substantially at fault.”

Significantly, even if you are 100% NOT at-fault, you will still have to pay a deductible if you have standard collision coverage. (MCL 500.3037(2); see also the Michigan Department of Insurance and Financial Services (DIFS) brochure “Brief Explanation of Michigan No-Fault Insurance” and “The Three Types of Collision Coverage.”)

Under Michigan No-Fault insurance, who pays deductible?

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