Our lawyers explain third party car insurance compensation. You may be entitled to be paid compensation for personal injuries after an accident.
       In Michigan, the at fault driver’s third party car insurance is the liability insurance coverage that provides compensation after a car accident to pay for the pain and suffering compensation, excess medical bills and excess wages loss from work and other economic damages owed to the persons injured in a car accident.
       Commonly referred to as “residual liability insurance” or “bodily injury liability insurance”, third party insurance is legally mandatory coverage for anyone who drives in Michigan. Additionally, Michigan law requires owners, registrants, and drivers to purchase this coverage with mandatory minimum coverage limits.
What is third party car insurance?
       In Michigan, third party car insurance is the liability insurance coverage available to the at-fault driver who caused your accident through his insurance company. It provides coverage if you claim or sue the at-fault driver for your injuries and damages. In Michigan the bodily injury liability insurance is mandatory. After Michigan's no fault law was reformed, beginning July 2, 2020, the minimum coverage liability coverage limits are $250,000 and $500,000. You should, however, buy more coverage because the new law exposes you to more risk since now the injury victim can claim excess medical and excess wage loss against you.
       Michigan drivers must have third party liability insurance with the following, legally required minimum coverage limits:
• “Not less than $250,000.00 because of bodily injury to or death of 1 person in any 1 accident.” See MCL 500.3101(1); MCL 500.3131(2); MCL 500.3009(1)(a)
• “Not less than $500,000.00 because of bodily injury to or death of 2 or more persons in any 1 accident.” See MCL 500.3101(1); See MCL 500.3131(2); See MCLA 500.3009(1)(b)
       However, Michigan law allows drivers to accept greater personal risk - “may choose to purchase lower limits” of $50,000 and $100,000. See MCL 500.3009(5).
       In Michigan, before July 2, 2020, the legally mandated minimum limits for third party insurance were $20,000 and $40,000. See MCLA 500.3101(1); 500.3131(2); 500.3009(1)(a) and (b). However, every single driver had unlimited medical coverage which could not be claimed against the at fault driver. Now, the car accident victim can claim excess medical and excess wages and other economic losses against you.
What does auto liability insurance cover?
       In Michigan, third party car insurance covers liability for pain and suffering compensation, excess medical benefits and lost wages and other economic damages an at-fault driver causes in a crash resulting in bodily injury or death to someone else. The extent of your insurance coverage will depend on the liability policy limit you purchase. Don’t skimp on your liability coverage limits because the risk that you personally take on can result in financial catastrophe if you hurt someone in a motor vehicle car accident.
       In Michigan, if you or a family member are injured in a car accident and the at-fault driver is found responsible for your injuries, then the at-fault driver’s insurance company may pay up to the insurance coverage bodily injury limit. At fault drivers  bodily injury liability insurance policy can pay for the following
• Pay Pain and suffering compensation to you. See MCL 500.3135(1), (2) and (3)(b))
• Pay your excess medical bills. This car accident related medical bills that exceed your No-Fault PIP medical benefits coverage level selected in the policy providing coverage to you for personal insurance protection benefits; or (2) all of your accident related medical bills if you are on Medicare, and you opted out of No-Fault medical coverage altogether. See MCL 500.3135(3)(c))
• Pay excess lost wages to you. See MCL 500.3135(3)(c). This is wages not covered by PIP insurance.
• Pay you damages for economic loss if you are not a Michigan resident. See MCL 500.3135(3)(d).
Should I get comprehensive or third party car insurance?
       Our personal injury law firm is aware of the practical pitfalls of the new no fault insurance changes that expose you and your family to significant financial risks. We are recommending to all clients that drivers get both comprehensive coverage and third party liability car insurance coverage commonly referred to a residual bodily injury insurance coverage. Don’t be penny wise and pound foolish.
       Our car insurance recommendations are posted on our blog. Please see our blog posts.
If you have comprehensive coverage do you still need liability insurance coverage?
       Comprehensive insurance is different optional coverage in Michigan. Comprehensive coverage only covers theft or vandalism unrelated to a car accident crash. You need third party insurance liability coverage is mandated coverage even if you have comprehensive coverage.
What car does third party insurance cover?
       Your third party insurance will cover the vehicle you own and identified on the insurance policy only. Make sure you identify each car you own on the insurance policy. If the vehicle you own is not identified on the policy, there will be no coverage. If you drive someone else’s vehicle, then your liability insurance coverage will generally cover you as long as you are a permissive user and you are not found to be an owner of the vehicle. Generally, the owner or registrant must insure the vehicle they drive.
Does third party liability insurance cover theft or vandalism?
       In Michigan, third party liability car insurance does not cover theft and vandalism. Comprehensive insurance would cover your vehicle for theft and vandalism, in addition to fire or glass damage unrelated to a car accident collision. Bodily injury liability insurance (third party liability insurance) covers a driver’s liability for bodily injury damages and economic losses caused by his or her negligence resulting from a car accident.
How much bodily injury liability insurance do I need?
       You need bodily injury liability car insurance with the minimum coverage limits required by law. Michigan requires a minimum of $250,000 per person and $500,000 per accident, but some drivers may choose lower limits of $50,000 and $100,000. Given the exposure to liability risks that all drivers face under the new Michigan No-Fault law, our law firm is recommending limits of $500,000 and $1 million to our clients. This may seem high, but really the financial risk to you and your family is too high now. Don’t gamble with your family’s financial future.
       in Michigan, Drivers who cause car accidents that injure or kill others can still be held liable for the pain and suffering they cause as well as the excess medical bills and lost wages their victims and their family experiences. The personal exposure has been shifted to the negligent driver for these damages, whereas before July 1, 2020, they were covered by required PIP coverage. In many cases, the medical bills not covered by auto insurance could go into the hundreds of thousands or millions of dollars for seriously injured car accident victims. Do you see the financial exposure?
In other words, the financial exposure to drivers, if your bodily injury liability insurance limits are too low to pay the compensation and damages if you’re found responsible will be enormous for your own personal assets to pay, such as your bank account, home, vehicles, wages and income, savings, retirement, college account and other investment assets.
How to file a bodily injury claim?
       In Michigan, you have three years from the date of the accident to file a third party bodily injury car insurance claim against the at-fault driver for pain and suffering compensation, excess medical bills and wage loss and other economic damages you sustain in the car accident. In order to recover pain and suffering, you must show a “serious impairment of body function,” as defined in the new law. Due to the complex nature of the no fault law, you will need an experienced car accident personal injury lawyer with the skill and knowledge to fully present your claim to the at fault parties motor vehicle insurance company for the maximum compensation you deserve.
Injured and need a lawyer? Call Experienced Michigan Auto Law Lawyers
       If you have been injured in a motor vehicle crash and you have questions about your legal entitlement to compensation under the at-fault driver’s third party car insurance, you can call anytime toll free at (866) 447-3563 for a free consultation with one of our experienced auto accident attorneys, or you can submit your inquiry on our contact page.