Michigan Car Accident: Who Pays? PIP, Mini-Tort, 3rd-Party

You’re holding a stack of mail. One envelope is from your insurance company. Another is from the other driver’s insurance company. Maybe a third from an insurer you’ve never heard of. They all want a statement, a signature, or a recorded call. None of them sat you down and explained what you’re actually owed.

Here’s the part nobody tells you: there’s a decent chance you’re owed money from three different places, and you’re only chasing one of them.

Michigan’s no-fault system is one of the most confusing in the country. It’s also one of the more protective, if you know which buckets to pull from. This is the map. For a step-by-step on the smallest bucket, see our guide to filing a Michigan mini-tort claim.

Who pays what after a Michigan car accident?

Up to three sources: your own insurer (PIP), the at-fault driver for vehicle damage (mini-tort), and the at-fault driver for injury losses (third-party claim). Each has its own rules, deadlines, and insurance company on the other side.

1. PIP (Personal Injury Protection): medical bills, wage loss, and replacement services from your own insurer, regardless of fault
2. Mini-tort: up to $3,000 for uncovered vehicle damage from the at-fault driver
3. Third-party bodily injury: pain and suffering, plus economic losses above PIP, from the at-fault driver

Most people think of a car crash claim as “one payout.” It’s not. Miss one bucket and you can leave real money on the table.

What does PIP pay, and how long do you have to claim it?

PIP pays your crash-related medical care, part of your lost wages, and replacement services, from your own auto insurer, regardless of who caused the crash (MCL 500.3107). You must give your insurer written notice within one year of the crash.

What PIP covers

• Medical expenses: ER, surgery, imaging, physical therapy, prescriptions, attendant care, and mileage to and from appointments, up to your policy’s medical limit
• Wage loss: 85% of your gross lost income, for up to 3 years after the crash, subject to a monthly cap that’s set each year and fixed by your crash date (more in our post on Michigan wage loss: 85%, 3 years, then what?)
• Replacement services: up to $20 a day for household tasks you can’t do anymore, like cleaning, yard work, or childcare

Your PIP medical limit depends on what you (or your policy) chose

For policies issued or renewed after July 1, 2020, drivers choose a PIP medical limit: $250,000, $500,000, or unlimited (MCL 500.3107c). Qualifying Medicaid enrollees can choose $50,000, and qualifying Medicare enrollees can opt out of PIP medical (MCL 500.3107d). If no valid choice was made, the default is unlimited. If you chose a lower limit to save on premiums, that limit is your ceiling. This is where a lot of seriously injured people get blindsided. Here’s who pays your medical bills when Michigan PIP runs out.

The PIP deadlines

Under MCL 500.3145, you must give your insurer written notice of your injury within one year of the crash (unless it has already paid benefits). Separately, if the insurer doesn’t pay and you sue, you can only recover losses incurred within one year before you file suit. That one-year-back window is paused from the time you submit a specific claim until the insurer formally denies it. Submit bills promptly and don’t let unpaid ones sit.

What is mini-tort, and how is it different from PIP?

Mini-tort is a claim against the at-fault driver for up to $3,000 of vehicle damage your own insurance didn’t pay (MCL 500.3135(3)(e)). PIP is about your body; mini-tort is about your car.

The quick version:

• The $3,000 cap applies to crashes after July 1, 2020. Earlier crashes are capped at $1,000.
• You can’t be more than 50% at fault, and your award is reduced by your share of fault.
• It usually covers your collision deductible, or your repair bill if you don’t carry collision.
• The deadline is three years from the crash (MCL 600.5805), and the claim normally goes to small claims court.

People skip mini-tort because it feels small next to the medical side. Our step-by-step mini-tort guide walks through the demand letter, the small claims form, and what to bring.

When can you sue the at-fault driver for pain and suffering?

Only if your injuries cause death, serious impairment of body function, or permanent serious disfigurement (MCL 500.3135(1)). This is the third-party bodily injury claim, and it’s the one with the biggest numbers attached.

The threshold requirement

Michigan doesn’t allow pain-and-suffering claims for every fender-bender. Most cases turn on serious impairment of body function, which MCL 500.3135(5) defines as an impairment that is:

• Objectively manifested (something a doctor can observe or measure, not just “I hurt”)
• Of an important body function
• Affecting your general ability to lead your normal life

A herniated disc with imaging and treatment records often qualifies. A sore neck that resolved in two weeks often doesn’t. Fault matters too: you can’t recover pain and suffering if you were more than 50% at fault, and a smaller share of fault reduces the award (MCL 500.3135(2)(b)).

What the third-party claim covers

• Pain and suffering: usually the biggest line item in serious-injury cases
• Excess economic loss: medical bills above your PIP limit, and wage loss above the monthly cap or past the 3-year mark (MCL 500.3135(3)(c)). This part does not require meeting the serious-impairment threshold.
• Loss of consortium for your spouse, in some cases

The deadline

Three years from the crash under MCL 600.5805. Longer than the PIP notice window, but waiting is still a mistake. Evidence disappears and witnesses move. See Michigan’s 3-year clock for what has to happen before then.

What does “stacking” the three claims look like?

Here’s a hypothetical. You get rear-ended. The other driver was fully at fault. You have a $500 collision deductible. You miss six weeks of work at $1,200 a week. You tear your rotator cuff and need surgery and four months of PT.

All three buckets can be in play:

• Mini-tort: your $500 deductible, from the at-fault driver
• PIP wage loss: 85% of 6 weeks × $1,200 = about $6,120, from your own insurer
• PIP medical: surgery and PT paid to your providers, up to your medical limit
• Third-party bodily injury: a pain-and-suffering claim for the torn rotator cuff, if the injury meets the threshold

Every case is different, and nobody can promise what the third-party claim is worth (here’s what drives Michigan auto accident case value). The point is that chasing only one bucket usually leaves the others on the table. Insurers aren’t required to point that out.

What should you do this week?

• Don’t give a recorded statement to the other driver’s insurer before you understand what you’re signing up for. Here’s why the adjuster called so fast.
• Send written notice of your PIP claim to your own insurer, well inside the one-year window.
• Keep every receipt: mileage, prescriptions, replacement services.
• Get a free second opinion on your case before you sign any settlement.

This article is general information about Michigan law, not legal advice for your situation.