A Michigan no-fault insurance lawsuit almost always falls into one of two categories: a first-party claim against your own insurer for denied or underpaid Personal Injury Protection benefits, or a third-party tort claim against an at-fault driver for injuries that clear the statutory threshold. Which one fits your situation depends on what was denied, when you were hurt, and how serious the injury is. A string of recent Michigan Supreme Court and Court of Appeals rulings — most importantly Andary v. USAA — has also redrawn the rules for people injured before the 2019 reform took effect.
Suing Your Own Insurer for PIP Benefits
If an insurer denies, cuts, or delays PIP benefits after a car crash, the injured person can sue under MCL 500.3145. Medical providers also have a direct cause of action under MCL 500.3112.
Two deadlines matter. First, written notice of the injury must reach the insurer within one year of the accident, giving the claimant’s name and address, the time and place of the accident, and the nature of the injury. Second, under the one-year-back rule, a lawsuit can only recover expenses incurred in the year before the suit was filed.1Michigan Legislature. MCL 500.3145
Money moves fast once the paperwork is right. If benefits are not paid within 30 days after the insurer receives reasonable proof of the loss, the overdue amount accrues penalty interest at 12 percent per year. A court can also award attorney fees when the insurer unreasonably refused or delayed payment, and additional interest under the Revised Judicature Act can push the cumulative rate above 17 percent.2Michigan State Bar. Michigan Bar Journal – No-Fault Claims
The one-year-back rule has a wrinkle worth knowing. The 2019 reform added a tolling provision that pauses the clock while the insurer is considering a specific claim. In Spine Specialists of Michigan PC v. MemberSelect Insurance Company, decided April 1, 2025 (Docket No. 165445), the Michigan Supreme Court held that this tolling does not apply retroactively to claims that accrued before June 11, 2019. A provider whose services were rendered in April and May 2019 saw its claims time-barred because the lawsuit was not filed until September 2020.3Michigan Courts. Spine Specialists of Michigan PC v. MemberSelect Insurance Company
Suing an At-Fault Driver
Michigan’s no-fault law generally abolishes tort liability arising from vehicle use, but there are openings. A person can sue an at-fault driver for noneconomic damages (pain and suffering, mental anguish, loss of enjoyment of life) if they suffered death, permanent serious disfigurement, or a “serious impairment of body function.” That last category requires an objectively manifested impairment of an important body function that affects the person’s general ability to lead a normal life, judged case by case by comparing life before and after the accident.4Michigan Legislature. MCL 500.3135
You can also sue for economic losses that exceed PIP coverage, including medical costs above the limit you chose and wages beyond the three-year PIP cap. Michigan applies a modified comparative fault rule: damages are reduced by the plaintiff’s percentage of fault, and a plaintiff more than 50 percent at fault generally cannot recover. The statute of limitations for third-party tort claims is three years from the date of the accident.5Auto No-Fault Law. What Liability Claims Can Be Made Against Michigan At-Fault Drivers
For property damage, the mini-tort provision lets a driver less than 50 percent at fault sue for up to $3,000 for accidents occurring after July 1, 2020. These claims typically go to small claims court.6Michigan.gov. Mini-Tort Information
Recent settlements show the range of what tort claims can produce. A Shiawassee County case involving a corporate employee who ran a stop sign and caused a spinal cord injury settled for $13 million. A wrongful death case involving a 78-year-old retiree killed in a T-bone collision settled for $6.95 million after black-box data showed the defendant applied no brakes until one second before impact.7Michigan Lawyers Weekly. 2023 Top Settlements
If You Were Injured Before June 11, 2019: Andary v. USAA
The single most consequential ruling since the reform is Andary v. USAA Casualty Insurance Company. Two catastrophically injured plaintiffs, Ellen Andary and Philip Krueger, along with the Eisenhower Center, sued USAA Casualty and Citizens Insurance Company of America, arguing that the 2019 fee schedules and the 56-hour weekly cap on family-provided attendant care could not constitutionally apply to people injured before the law took effect.8Auto No-Fault Law. Lawsuit Challenging Michigan No-Fault Insurance Reform
They won. On July 31, 2023 (Docket No. 164772), the Michigan Supreme Court affirmed the Court of Appeals and held that PIP benefits are both contractual and statutory, and that the right to those benefits vests at the moment of the accident. Because the 2019 amendments contained no clear legislative intent to alter vested rights, the pre-amendment statutes continue to govern benefits for anyone injured before June 11, 2019. More than 17,000 pre-reform accident victims were shielded from the fee cuts and attendant care caps.9Michigan Courts. Andary v. USAA Casualty Insurance Company, Docket No. 164772
On the separate question of whether the fee schedules violate equal protection or due process going forward, the court dismissed those claims, finding the schedules survive rational-basis review because they are reasonably related to reducing PIP costs and lowering premiums. In other words, Andary protects pre-reform victims; it does not help someone injured after June 11, 2019, challenge the fee schedule.10Michigan Home Health Association. About Auto No-Fault
What Andary Covers After the DIFS Fight
After the ruling, the Department of Insurance and Financial Services argued that Andary blocked retroactive application of only two specific provisions: the 55 percent non-Medicare cap and the 56-hour attendant care limit. Insurers were threatened with enforcement if they refused to apply other parts of the fee schedule retroactively.
A group of insurers led by Auto-Owners Insurance Company sued DIFS in the Michigan Court of Claims. On February 21, 2025, Judge Christopher Yates ruled that DIFS had misread Andary and that none of the fee schedule limitations could be applied retroactively to pre-June 11, 2019 injuries.11Legal News. Auto-Owners Insurance Company v. DIFS The Michigan Court of Appeals reinforced the point in Fremont Insurance Co. v. Lighthouse Outpatient Center on April 11, 2025, and DIFS withdrew its earlier position in Bulletin 2025-11-INS on April 25, 2025, formally acknowledging that no part of the fee schedule in MCL 500.3157 applies to treatment costs for patients injured before the reform.12Coalition Protecting Auto No-Fault. Analysis of DIFS Bulletin 2025-11-INS
The practical result for a pre-2019 accident victim or their provider: fee schedule cuts should not be applied to your treatment, and benefits reduced on that basis are grounds for a claim.
Other Recent Decisions That May Affect Your Claim
Bonter v. Progressive Marathon (2025)
Decided July 2, 2025 (Docket No. 166182), Bonter addressed “straddle policies” — those issued before July 2, 2020, whose coverage period extended past that date. The Michigan Supreme Court held that these policies must include the new $250,000/$500,000 bodily injury liability minimums for the portion of coverage after July 1, 2020. The upshot is that accident victims injured after that date can access the higher liability limits even when the at-fault driver’s policy was issued earlier.13Michigan State Bar. Bonter v. Progressive Marathon Insurance Company, Docket No. 166182
Isovska v. Fitzpatrick (2025)
In a Court of Appeals ruling issued October 30, 2025 (Case No. 368902), the court struck down “Exclusion D,” a common policy provision denying PIP coverage when the insured was driving a vehicle not listed on the policy. Muzafer Isovska, insured by USA Underwriters on a Toyota Yaris, was injured driving a Ford Focus covered under her daughter’s Progressive policy; both insurers denied benefits. The court held the exclusion conflicts with MCL 500.3114(1), which requires PIP coverage to follow the insured person, not the vehicle.14Michigan Courts. Isovska v. Fitzpatrick, Case No. 368902
Bellmore v. Friendly Oil Change (2024)
Decided February 9, 2024 (Docket No. 164534), Bellmore confirmed that injuries sustained during vehicle maintenance qualify for PIP without a separate “parked vehicle” analysis under MCL 500.3106(1). The plaintiff fell into a service pit during an oil change, and the court found the pit analogous to a hydraulic lift, with a causal relationship to vehicle maintenance that was “more than incidental, fortuitous, or but for.”15Michigan Lawyers Weekly. High Court: PIP Benefits OK for Oil Change Pit Fall
Moody v. Zakir (2023)
Decided May 31, 2023, Moody held that when an insurer rescinds a no-fault policy after an accident, the insured is not retroactively treated as uninsured at the time of the accident for purposes of the tort threshold in MCL 500.3135(2)(c). The ruling protects claimants from losing the right to sue because of a coverage dispute that only surfaces later.16Auto No-Fault Law. Michigan Supreme Court No-Fault Decisions
Which Insurer You Sue First
Michigan law sets a strict priority order for PIP claims. Since the 2019 reform, the hierarchy is:
- The injured person’s own insurer.
- The insurer of the injured person’s spouse.
- The insurer of a relative living in the same household.
- The Michigan Assigned Claims Plan, if no coverage exists above.
The reform removed “insurer of the vehicle involved in the accident” from the priority list, which simplified the analysis but opened potential gaps when household members carry different coverage tiers. Benefits are capped at the aggregate limit equal to the highest available limit under any single policy in the same priority tier.17Michigan Legislature. MCL 500.311418Miller Johnson. Know the New No-Fault Priority Rules but Beware of Coverage Gaps
The Assigned Claims Plan has become more restrictive. Most claims processed through it are now capped at $250,000, and practitioners have described the application process as significantly more complicated and time-consuming than under the prior law.
When PIP Runs Out
More than 2.5 million Michigan drivers — over 28 percent — have chosen a PIP coverage level below unlimited, according to June 2024 data from the Insurance Alliance of Michigan. Another 86,000 opted out of PIP entirely.19Insurance Alliance of Michigan. More Michigan Drivers Choose PIP Levels Other Than Unlimited
Running out of PIP changes what a lawsuit can achieve. A person who chose $250,000 in PIP and sustains a catastrophic spinal cord injury can exhaust that limit quickly. Once PIP is depleted, the options are to sue the at-fault driver for excess medical costs (assuming adequate liability coverage), pay out of pocket, seek Medicaid, or file for bankruptcy. At-fault drivers now face personal liability for medical expenses that exceed a victim’s chosen PIP level, exposure that did not exist before the reform.20Auto No-Fault Law. What Reimbursement Limits Are Applicable to Michigan PIP Benefits
Drivers who opted out of PIP and later lose their qualifying health coverage have a 30-day window to notify their insurer and secure PIP. An accident outside that window, without new coverage in place, leaves the driver with no entitlement to PIP from any policy or from the Assigned Claims Plan.21Michigan DIFS. No-Fault FAQ
PIP settlements in catastrophic cases can still be substantial where coverage exists. Two 2023 settlements each exceeded $4 million. In one, an insurer had reduced attendant care benefits by 45 percent for a person with C5 quadriplegia injured in 1994; after the plaintiff obtained an injunction, the case settled for $4,395,036. In the other, a person with C4 quadriplegia from a 2008 accident settled a third lawsuit over underpaid attendant care for $4,240,860.7Michigan Lawyers Weekly. 2023 Top Settlements