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Michigan No-Fault Coverage for Property Damage

Attorney Commentary No Fault Statute: MCL 500.3121

Property protection insurance; accidental damage; loss of use; limit

In addition to No-Fault insurance benefits for personal injury following an auto accident, you may also collect property protection insurance (PPI) benefits under the Michigan No-Fault Act.

The purpose of PPI benefits is to compensate for “accidental damage to tangible property” resulting from an accident involving any insured car or truck.

For a car accident victim to be entitled to PPI benefits, two requirements must be met:

1. Property damage must “aris[e] out of the ownership, operation, maintenance, or use of a motor vehicle as a motor vehicle…”

The requirement that the motor vehicle must be “used as a motor vehicle” has been the subject of controversy and much litigation in Michigan courts. Bottom line: There must be some connection between the property damage and a motor vehicle having been used in a way that is consistent with its designed and intended purpose.

For example, in one well-known case, the Michigan Court of Appeals decided that PPI benefits were not available where improperly loading a delivery truck resulted in an explosion. The Court explained that loading a truck is not using “a motor vehicle as a motor vehicle.” (Ford Motor Company v. INA, (1987))

In an earlier case, however, a U.S. District Court in Michigan decided that the unloading of a truck did satisfy the requirement that a motor vehicle must be used as a motor vehicle. (BASF Wyandotte Corp. v. Transport Insurance Company, (1981))

2. Property damage must be accidental.

PPI benefits are not available where an individual intentionally damages property.

3. Fault is not an issue for PPI benefits

It is important to note that PPI benefits are similar to No-Fault benefits because it does not matter who was at-fault for the property damage. PPI benefits are due “without regard to fault.” That means that, even if the person who is seeking the PPI benefits caused the motor vehicle accident because he was careless or irresponsible, as long as the damage was not done intentionally, he is still entitled to PPI benefits.

Types of Property Damage

An individual can be compensated for three types of property damage following an auto accident under the Michigan No-Fault Act:

  • Damage to property
  • Destruction of property
  • Loss of use of property

Calculating how much money a person is entitled to for damage to property is sometimes difficult. An individual may receive either the cost of repairing the property damage or the cost of replacing the property minus depreciation, whichever amount is less. Also, a person may receive money to compensate them for being deprived of the use of their property.

Some property damage is excluded from PPI compensation according to Michigan law. One example is damage that occurs to the property of a commercial repair facility while it is in the process of repairing a vehicle. For example, if a repair shop catches on fire in the course of repairing or maintaining a customer’s vehicle, the shop owner is not entitled to PPI benefits. The customer, on the other hand, may file a claim for PPI benefits for the damage to his vehicle.

The No-Fault Attorneys of Michigan Auto Law

The lawyers of Michigan Auto Law have been specializing in automobile No-Fault litigation for more than 50 years. If you have been injured in a car, truck or motorcycle accident and need help navigating your No-Fault insurance, please call one of our expert attorneys for a free case evaluation at (800) 777-0028 or fill out our consultation form. There is no fee or obligation.

We are here to help you.

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