I live in Michigan. Recently, state law changed such that we have "no-fault" auto insurance.

We still must hold liability of $50,000 per person, $100,000 per accident. Since we are in a "no-fault" state, is there any reason to increase this amount?

3 Answers 3


The document you linked says:

You may be sued because of an accident, as was discussed in the section on residual liability insurance. If this happens, your no-fault policy will pay up to the amounts shown in the residual liability section.

However, courts sometimes award more than these amounts. If this happens, you would be responsible for paying the amount not covered by your insurance policy. To protect themselves, many people buy higher limits of liability insurance.

That's the reason people opt for coverage in excess of the liability minimums. For example the minimum requirement covers:

  • Up to $40,000 for each accident if several people are hurt or killed.

If you did something horrific, say you drunkenly ran into a full bus killing all passengers, you'd almost certainly be sued and ordered to pay significantly more than $40k.

It's worthwhile looking into an umbrella policy too, in my opinion.

  • Don't forget that there are many things on the road that aren't passenger vehicles (construction equipment, tractors, animal trailers, etc) and are worth significantly more. You can easily exceed $50k in damage by knocking a nice speedboat off of its trailer. Or if you ran off the road into a shop window, knocked over a statue, hit a delivery truck full of furniture, etc. In other words, there's more out there to hit than passenger vehicles.
    – bta
    Commented Nov 7, 2020 at 4:16
  • Hospital cost can easily be more than $100,000. Life changing damages to a person can cost a lot more. So can crashing into a Bugatti Veyron.
    – gnasher729
    Commented Nov 7, 2020 at 13:13

Since we are in a "no-fault" state, is there any reason to increase this amount?

Answer, No.

The "no-fault aspect" does not in any way reduce your liability when driving.

You would easily be sued for $1m or more due to your actions when driving.


In Germany, the worst cost of a traffic accident caused by a car was equivalent to about $70,000,000. In Spain, a lorry driver killed about 340 people by accident (fuel truck drove into a full camping ground). What do you think is the cost if you hit an 18 year old who will spend the rest of his life in a wheelchair? To anyone outside the USA a $100,000 limit seem quite pathetic.

“No fault” insurance doesn’t mean you don’t have to pay. It means my insurance has to hand over money to me. My insurance will then ask you and your insurance to pay the money back. If the cost is above the limit you are in trouble. You may lose your million dollar home and be bankrupt for life. It’s just a way to keep me safe from uninsured or lowly insured drivers.

However, a much higher limit doesn’t cost much more. Because most accidents are below the limit. European countries usually have at least a million in third party liability.

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