Because Michigan is a no-fault state, people are often confused as to why fault is assessed in the event of an accident. To the unlicensed individual this can be very confusing. First lets explain that there are two types of Auto Insurance laws in the U.S., No Fault and Tort states. In a no fault state, the owner of the vehicle is responsible for their own damages to their vehicle. However, in a Tort State, only the at fault party is responsible for damages to both vehicles. In Michigan, they instituted a Mini-Tort law to provide a means to recoup your deductible from the party that is deemed 50% or more at fault.
If your are insured with a standard company and have a reputable agent, your policy likely has coverage for your responsibility and can be found on your policy as “Limited Property Damage.” In 2020, Michigan raised the Mini-Tort liability from $1,000 to $3,000. This was done to allow some folks with older vehicles to forgo collision coverage, knowing that they can recoup some money for their vehicle in the event it is not their fault. The thing you must be aware of when doing this, is that you get nothing if it was your fault or you are unable to track down the at-fault party because it was a hit and run.
The process of filing a mini-tort claim is pretty simple, provided the other party is insured and carries the limited property damage coverage. You simply contact the insurer of the at-fault party and tell them you need to file a mini-tort claim to start the process. They will provide you a form to complete and return with a copy of the accident report and proof of repairs. However, if the at-fault party is not insured or maybe they have a cut rate carrier with no Limited Property Damage coverage, you will likely have to take the at-fault party to small claims court and seek judgement that way.
We always advise our clients of their option within the mini-tort law, as an alternative to carrying Broad Collision. For those that are unaware, Broad Collision states that your deductible is waived when it is not your fault, regardless of whether the Insurance carrier can find the at fault party. But you pay a premium to have this piece of mind, and sometimes there can be a significant savings to carry a Standard Collision. It is important however to understand the pitfalls that may arise when you do carry Standard Collision, and that you may get stuck paying your deductible even though it was not your fault.
For more information on the mini tort laws visit Michigan.gov at https://www.michigan.gov/documents/cis_ofis_ip206_25091_7.pdf
