OAI: Michigan Senate Vote Spotlights Mini-tort Auto Insurance Law

Detroit, MI, May 24, 2012 --(PR.com)-- A bill doubling the cap on damages that drivers can seek in court through Michigan's mini-tort provision was recently approved by senators in Michigan, highlighting mini-tort as one of the few exceptions to the state’s no-fault law that excludes most crashes from litigation, according to Online Auto Insurance.

HB 5362, unanimously approved by the state Senate last week, increases the mini-tort limit from $500 to $1,000. Mini-tort is a legal provision that gives motorists the power to sue an at-fault motorist for crash damages not covered by their own insurance; it is an exception to the state’s no-fault law that reimburses policyholders for their own damages after crashes regardless of fault.

Mini-tort is unique to Michigan, so drivers there may understandably have more than just one auto insurance question about it.

Mini-tort, covered by what's sometimes called limited property damage liability coverage, allows drivers who didn't cause an accident but need to pay the deductible on a collision claim to repair their car and recover at least part of their deductible from the driver who's at fault for a crash.

"Despite rising costs, the amount residents can collect for damages under the mini-tort provision hasn't been increased in decades," said Rep. Cindy Denby (R-Handy Township), who sponsored the bill, in a statement. "This common-sense reform will be helpful to Michigan drivers."

The bill goes into effect Oct. 1. The last increase to the mini-tort limit was in 1995, when cap was raised $100.

In court, exposure to fault for these crashes are comparative-based, according to the legislation. Drivers who are found to be 50 percent or more at fault for a crash can be sued for damages up to the mini-tort limit by other drivers whose cars are not completely covered by their policy.

Levels of fault can also determine the size of damages awarded in court. A mini-tort defendant at fault for 75 percent of a crash involving $100 in damages may have to pay the plaintiff $75, according to the state's mini-tort consumer guide.

Source: http://www.michigan.gov/documents/cis_ofis_ip206_25091_7.pdf

OAI recommends that drivers who anticipate getting in lesser-costly collisions like fender benders obtain mini-tort coverage, as damages they could be awarded in court are usually within the newly approved $1,000 mini-tort cap. Drivers who drive mostly in dense, urban areas where cars go at slower speeds might want to take the optional coverage into strong consideration.

Minor changes to coverage brought by HB 5362 include explicitly excluding uninsured drivers from being able to sue under mini-tort and separating residual liability coverage so that its policyholders are not exempt from those seeking mini-tort compensation.

The bill got another unanimous approval in the state House on April 19. State trade groups, including the Insurance Institute of Michigan and Michigan Association of Insurance Agents, attended a House committee hearing in March to offer support for the legislation.

For more on this and related issues, head to www.onlineautoinsurance.com/learn/ for access to an easy-to-use quote-comparison generator and informative resource pages.