First-Party Auto Insurance in Michigan | Who Pays After a Crash?

When you’re involved in a car accident in Michigan, the first question many drivers ask is: Who pays for my damages? Michigan operates under a no-fault insurance system, meaning you typically turn to your own insurance company for certain benefits, regardless of who caused the crash. This is known as first-party auto insurance.

First-party coverage is broader than just medical bills. It also includes vehicle damage coverage, uninsured/underinsured motorist protection, and other key benefits that protect you financially after an accident. However, insurance companies don’t always make the claims process easy….delays, lowball settlements, and wrongful denials are common.

This guide breaks down how first-party insurance works in Michigan, what’s covered, and how to protect your right to compensation. If you’re facing a claim denial or dispute, a Michigan auto insurance lawyer can help you fight for the benefits you deserve.

Table of Contents

What Is First-Party Auto Insurance in Michigan?

First-party auto insurance is the coverage you purchase for yourself, designed to pay for your own losses after a car accident, regardless of fault. Under Michigan’s no-fault system, this type of insurance ensures that drivers receive essential benefits without needing to sue the at-fault driver in most cases. First-party coverage includes:

Personal Injury Protection (PIP) – Covers medical bills, lost wages, and essential care services.
Collision & Comprehensive Coverage – Pays for vehicle repairs or replacement after an accident, theft, or natural disaster.
Uninsured/Underinsured Motorist Coverage (UM/UIM) – Protects you if the at-fault driver lacks sufficient insurance.
Property Protection Insurance (PPI) – Covers damage your vehicle causes to another person’s property (not including vehicles).

Unlike third-party claims, which involve suing another driver, first-party insurance is designed to provide faster access to benefits—but that doesn’t mean insurance companies always pay fairly. Understanding your policy and your rights is crucial to securing the full compensation you’re owed.

Types of First-Party Auto Insurance Coverage

First-party auto insurance includes several types of coverage designed to protect you and your property after a car accident—regardless of fault. The table below outlines the key components of first-party coverage and what each type protects.

🚘 Coverage Type	🔍 What It Covers	💡 Key Notes
🏥 Personal Injury Protection (PIP)	Medical bills, lost wages, attendant care, and rehabilitation costs	Required in Michigan; coverage levels vary
🚗 Collision Coverage	Repairs or replacement for your vehicle after an accident	Pays regardless of fault (minus deductible)
🌪️ Comprehensive Coverage	Damage from theft, fire, vandalism, or natural disasters	Covers non-collision incidents (e.g., hitting a deer)
🚦 Uninsured Motorist (UM) Coverage	Medical expenses and pain & suffering if hit by an uninsured driver	Optional but strongly recommended
⚠️ Underinsured Motorist (UIM) Coverage	Pays if the at-fault driver’s insurance isn’t enough to cover your damages	Optional but highly beneficial
🏠 Property Protection Insurance (PPI)	Covers damage your vehicle causes to stationary property (e.g., buildings, fences)	Required in Michigan; does not cover other vehicles
💰 Mini-Tort (Limited Property Damage Liability)	Up to $3,000 for vehicle damage when the at-fault driver lacks collision coverage	Only applies if the other driver is more than 50% at fault

Not all drivers carry the same level of first-party auto insurance coverage and the type of protection you have depends on your policy choices. Michigan law requires drivers to carry Personal Injury Protection (PIP) for medical expenses and lost wages as well as Property Protection Insurance (PPI) to cover damage your vehicle causes to stationary property. However, other types of coverage like collision, comprehensive, uninsured motorist (UM), and underinsured motorist (UIM) coverage are optional and vary by policy.

Many drivers assume their insurance will cover all accident-related expenses but without collision or UM/UIM coverage, you could be left paying out-of-pocket for vehicle repairs or injuries caused by an uninsured or underinsured driver. Reviewing your policy details and understanding what’s covered under first-party insurance can help ensure you’re fully protected in case of an accident.

Who Pays for Damages After a Michigan Car Accident?

Michigan’s no-fault insurance system determines who pays for accident-related expenses based on the type of damages incurred. In many cases, your own first-party auto insurance covers certain losses, while third-party claims may be necessary if the other driver was at fault, you suffered a serious injury, and your damages exceed no-fault coverage limits. Below is a table outlining who pays for what under Michigan’s first-party and third-party insurance system.

🚗 Type of Damage	🏠 First-Party Insurance Pays	⚖️ Third-Party Insurance Pays
Medical Bills & Rehabilitation	✅ PIP Benefits (Up to Policy Limit)	❌ No, unless excess medical costs exceed PIP limits
Lost Wages	✅ PIP Benefits (Up to 3 Years, Capped)	❌ No, unless wage loss exceeds PIP limits
Replacement Services (Household Help)	✅ PIP Benefits ($20/day)	❌ No
Pain & Suffering	❌ No	✅ Yes, if injuries meet Michigan’s serious impairment threshold
Vehicle Repairs (Collision Damage)	❌ No	✅ At-fault driver’s insurance (only if they have Mini-Tort Coverage)
Property Damage (Buildings, Fences, etc.)	✅ Property Protection Insurance (PPI)	❌ No
Excess Medical Expenses	❌ No	✅ Yes, if PIP limits are exhausted and the other driver was at fault
Wrongful Death Damages	❌ No	✅ Yes, for pain and suffering, lost financial support, and funeral costs

Understanding whether your insurance or the at-fault driver’s insurance is responsible for covering accident-related damages is crucial when filing claims. While first-party benefits handle immediate expenses, serious injuries or high-value losses may require third-party claims to recover full compensation.

How Michigan’s No-Fault Law Affects First-Party Coverage

Michigan’s no-fault insurance law is designed to ensure that accident victims receive compensation for medical expenses, lost wages, and essential services regardless of who caused the accident. However, this law also impacts what your first-party auto insurance covers and the limitations on claims. Here are the key ways that no-fault law affects first party coverage:

You Must Rely on Your Own Insurance First – If you’re injured in an accident, you cannot sue the at-fault driver immediately for medical bills or lost wages. Instead, you must file a claim with your own Personal Injury Protection (PIP) insurance.
Coverage Limits Depend on Your Policy – Since the 2020 Michigan auto insurance reform, drivers can choose different PIP coverage levels, which determine how much medical care is covered.
You Cannot Recover Pain & Suffering Through PIP – First-party insurance covers economic losses, such as medical expenses and wage loss, but does not compensate for pain and suffering. To recover these damages, you must meet Michigan’s serious impairment threshold and file a third-party lawsuit.
Mini-Tort Covers Limited Vehicle Repairs – Michigan’s mini-tort law allows you to recover up to $3,000 from the at-fault driver for vehicle damage, but only if they were at least 50% responsible for the accident.

Understanding how no-fault rules impact first-party claims can help you maximize your insurance benefits and determine whether additional legal action is necessary. If your medical bills exceed your PIP limits or you’ve suffered a serious injury, you may need to pursue a third-party claim against the at-fault driver.

When to File a First-Party Insurance Claim

Filing a first-party insurance claim is necessary in many situations, especially when your own insurance policy is responsible for covering your losses under Michigan’s no-fault system. Unlike a third-party claim which is filed against the at-fault driver’s insurance, a first-party claim ensures you receive compensation directly from your own insurer. These are some common situations where you should file a first-party claim:

After Any Car Accident (Regardless of Fault) – Under Michigan’s no-fault law, your PIP insurance covers medical expenses, lost wages, and other benefits—even if you caused the crash.
In a Hit-and-Run Accident – If the at-fault driver flees the scene and is never identified, your Uninsured Motorist (UM) coverage (if purchased) may help compensate for injuries and damages.
When the At-Fault Driver is Uninsured or Underinsured – If the other driver lacks sufficient insurance, you may need to file a UM/UIM claim to recover additional compensation.
For Single-Car Crashes – If you hit an object, slide off the road, or experience weather-related damage, your collision or comprehensive insurance may cover repairs, depending on your policy.
If Your Own Insurance Policy Covers the Loss – Even when another driver is at fault, your policy may be the primary source of compensation, depending on your coverage type and Michigan’s insurance priority rules.

Filing a first-party claim ensures that you receive immediate benefits without waiting for a liability dispute to be resolved. However, insurance companies often try to minimize payouts—so it’s essential to document your damages, understand your rights, and seek legal help if your claim is delayed or denied.

Common Issues with First-Party Insurance Claims & How to Dispute Denials

Filing a first-party insurance claim should provide fast access to benefits, but insurance companies don’t always make the process easy. Delays, denials, and underpayments are common, leaving accident victims struggling to cover medical bills and other expenses. Below is a table outlining common reasons first-party claims get denied and how to challenge the denial effectively.

🚨 Denial Reason	❌ Why It Happens	🔍 How to Fight Back
⏳ Missed Filing Deadline	No-fault claims must be filed within one year of the accident.	Submit all paperwork ASAP and keep records of communications with your insurer.
📜 Policy Exclusions	Some policies exclude coverage for unlisted drivers, DUI-related crashes, or commercial vehicle use.	Review your policy terms carefully—some exclusions may not be valid under Michigan law.
🏥 Disputed Medical Necessity	Insurer argues your treatment was unnecessary or unrelated to the accident.	Get a doctor’s statement linking treatment to accident injuries and appeal with supporting medical evidence.
📂 Failure to Provide Documentation	Missing medical bills, police reports, or proof of lost wages.	Submit all required documents and request a written reason for denial if your claim is rejected.
⚠️ Allegations of Fraud or Misrepresentation	Insurer claims you exaggerated injuries or withheld information.	Provide full transparency and request a detailed explanation of any fraud allegations.
🚫 Bad Faith Denial	The insurer refuses to pay a valid claim without justification.	Consult a lawyer—bad faith practices may allow you to sue for additional damages.

If your first-party claim is delayed or denied, don’t accept the insurance company’s decision without a fight. You have the right to appeal denials, provide additional evidence, and take legal action if necessary to recover the benefits you’re owed.

Frequently Asked Questions About First-Party Auto Insurance in Michigan

What is first-party auto insurance in Michigan?

First-party auto insurance refers to coverage you purchase for yourself, including Personal Injury Protection (PIP), Property Protection Insurance (PPI), collision, comprehensive, and uninsured/underinsured motorist (UM/UIM) coverage.

Does first-party insurance cover my medical bills after an accident?

Yes, PIP coverage pays for medical expenses, lost wages, and other benefits, regardless of who caused the crash. However, coverage limits depend on the policy you selected.

When should I file a first-party insurance claim?

File a first-party claim when you need benefits from your own policy, such as PIP benefits for medical expenses or collision coverage for vehicle repairs.

Can I sue the at-fault driver if I use first-party insurance?

It depends. No-fault rules limit lawsuits, but you can sue for pain and suffering or excess damages if your injuries meet Michigan’s serious impairment of bodily function threshold.

What happens if my first-party claim is denied?

You can appeal. Insurance companies often deny claims due to missing documents, policy exclusions, or bad faith practices. If your claim is unfairly denied, you may need a lawyer to challenge the decision.

Does first-party insurance cover hit-and-run accidents?

Yes, if you have PIP and uninsured motorist (UM) coverage, you can file a claim even if the at-fault driver is unknown.

How long do I have to file a first-party insurance claim?

You must file a PIP claim within one year of the accident. Other claims, like collision or UM/UIM, have different deadlines depending on your policy.

Contact a Michigan Auto Insurance Lawyer Today

Dealing with first-party insurance claims can be overwhelming especially when insurers delay, deny, or underpay your benefits. You pay for coverage to protect yourself after an accident, and you deserve fair treatment from your insurance company. At The Clark Law Office, we fight for accident victims who are struggling to recover the benefits they rightfully deserve. Unlike large firms that treat you like a case number, we provide personalized attention and aggressive legal representation to ensure you get the compensation you need. If your first-party insurance claim has been denied, delayed, or undervalued, don’t fight the insurance company alone. Call us today for a free consultation, and let’s discuss how we can protect your rights.

See how first-party benefits fit into broader no-fault coverage in our insurance and no-fault guide.

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