MCL 500.3114: Michigan No-Fault Order of Priority

MCL 500.3114 is the Michigan statute that decides which auto insurer pays your Personal Injury Protection (PIP) benefits after a crash. It sets a fixed order of priority, and the order depends on what you were doing when you were hurt: driving your own car, riding as a passenger, working in a company vehicle, riding a motorcycle, or walking. For most people the answer is simple. For motorcyclists, employees, and taxi passengers, it isn’t.

Your Own Policy Comes First for Most Occupants

If you were driving or riding in a private passenger vehicle, subsection (1) points to your own no-fault policy first. The statute covers the named insured, that person’s spouse, and any relative of either who lives in the same household.¹ It doesn’t matter whose car you were in. A passenger in a friend’s vehicle still files with their own insurer.

If you don’t carry a policy, the sequence moves down: a spouse’s policy in the same household, then a policy held by a resident relative of either of you. Michigan courts read “domiciled in the same household” through practical facts like where a person sleeps, keeps belongings, and receives mail, which is how a college student can still qualify as a resident of a parent’s home.

Subsection (1) also blocks the insurers from fighting over your claim while you wait. If both your policy and a household member’s policy would cover you, your insurer pays up to your limit and cannot seek reimbursement from the other carrier.¹

Passengers in Taxis, Buses, and Limousines

Subsection (2) pulls passengers-for-hire out of the standard order. If you were riding in a vehicle operated as a passenger-for-hire service, that vehicle’s insurer pays your PIP benefits, whether or not you carry your own auto policy.¹ Taxis, buses, and limousines fall here. The commercial carrier bears the coverage responsibility because the passenger paid for the transportation.

Employees in Company Vehicles

Subsection (3) does something similar for work vehicles. An employee injured while riding in a vehicle owned or registered by their employer looks to the employer’s insurer first, even if the employee also has a personal auto policy. That priority also extends to the employee’s spouse and household relatives when they were in the employer’s vehicle.¹ The rule places work-related vehicle injuries on the business whose vehicle is in use.

Motorcyclists Follow a Different Order

Motorcycles are not “motor vehicles” under the No-Fault Act, and motorcycle policies do not carry PIP benefits on their own.² When a motorcyclist is hurt in a crash involving a car, truck, or other motor vehicle, subsection (5) sets a separate sequence that starts with the car’s insurance, not the rider’s:¹

The insurer of the owner or registrant of the motor vehicle involved.
The insurer of the operator of that motor vehicle.
The motor vehicle insurer of the motorcycle’s operator.
The motor vehicle insurer of the motorcycle’s owner or registrant.

The rider only reaches their own motor vehicle policies, such as a separate car they insure, after exhausting the motor vehicle side of the crash. That is a full reversal of the household-first rule that applies to regular occupants.

When a Policy in the Chain Has Opted Out

The 2019 reforms let some Michigan drivers reduce or opt out of PIP coverage. Subsection (6) says that if a policy in the motorcycle priority chain belongs to someone who opted out of PIP, the injured rider skips that policy and moves to the next one. If every policy in the chain has opted out, the claim goes to the Assigned Claims Plan.¹

Two Policies at the Same Level

Subsection (7) covers ties. When two or more policies sit at the same priority level, the injured motorcyclist’s total recovery is capped at the highest single coverage limit among those policies, not the combined total.¹

The Assigned Claims Plan Is the Last Resort

When no policy exists anywhere in the priority chain, subsection (4) sends the claim to the Michigan Assigned Claims Plan (MACP).¹ The MACP is the safety net for people who cannot find higher-priority coverage through a spouse, relative, employer, or commercial vehicle. Uninsured pedestrians often land here.

Two limits matter. First, PIP benefits through the MACP are capped at $250,000, where before the 2019 reforms the plan paid uncapped medical benefits.³ For a catastrophic injury with no other health coverage, that cap can be exhausted quickly. Second, you must notify the Michigan Automobile Insurance Placement Facility within one year of the accident. Miss that window and you lose access to the plan entirely.⁴

How Much Your Priority Insurer Pays

Priority tells you who pays. It doesn’t tell you how much. Since July 2020, the PIP coverage attached to the top policy in your chain is whatever tier that policyholder chose under MCL 500.3107c:⁵

$50,000 per person per accident, available only if the named insured is on Medicaid and household members have qualifying coverage or their own PIP.
$250,000 per person per accident.
$500,000 per person per accident.
Unlimited lifetime medical benefits.

A full PIP medical opt-out is also available when all household members have qualifying health coverage such as Medicare Parts A and B. TRICARE and CHAMPVA qualify; VA coverage does not.⁶ If the insurer at the top of your priority chain sold a $250,000 policy, that is your cap, regardless of what any lower-priority insurer might have offered.

Deadlines That Can Erase Your Claim

Even the correct priority insurer will not pay if you miss the deadlines in MCL 500.3145:⁷

Within one year of the accident, you must either give written notice of injury to the insurer or receive a PIP payment. If neither happens, you lose the right to sue for benefits.
Once the claim is preserved, you can file suit within one year after your most recent qualifying expense or wage loss, but you cannot recover benefits for losses incurred more than one year before the lawsuit was filed.
The clock pauses between the date you submit a specific claim and the date the insurer formally denies it, provided you are pursuing the claim with reasonable diligence.

The one-year-back rule is where most people lose money. Notice alone protects the right to sue; it does not preserve every past expense. If an insurer is dragging its feet, filing suit sooner protects what you can still recover.

1
Michigan Legislature. Michigan Compiled Laws 500.3114
2
Michigan Legislature. Michigan Compiled Laws 500.3101
3
Michigan Department of Insurance and Financial Services. State Reaches Settlement to Protect Michigan Car Accident Victims
4
Michigan Legislature. Michigan Compiled Laws 500.3174
5
Michigan Legislature. Michigan Compiled Laws 500.3107c
6
Michigan Department of Insurance and Financial Services. Auto Insurance Reform FAQ
7
Michigan Legislature. Michigan Compiled Laws 500.3145