Disclaimer: This article is for informational purposes only. It does not constitute legal advice. Consult a licensed attorney to discuss your specific situation.
Detailed Answer
After a car accident in Michigan, you may incur rental car expenses or lose use of your vehicle while it’s being repaired. If the at-fault driver’s liability policy limits are exhausted, you still have several avenues to recover these costs.
1. First-Party PIP Replacement Transportation Benefits
Michigan’s no-fault law requires Personal Injury Protection (PIP) insurers to cover replacement services, including rental cars. Under MCL 500.3107(1)(b), your own insurer pays 80% of reasonable rental expenses, up to $20 per day, while your vehicle is out of service. You must submit rental invoices and proof of the accident to trigger this benefit. Link to statute: MCL 500.3107.
2. Rental Reimbursement Endorsement
Many auto policies offer a rental reimbursement endorsement. If you purchased this add-on, your insurer will pay for a rental car regardless of fault. Coverage limits vary, so review your declaration sheet to confirm daily and aggregate limits. Submit receipts and proof of repair timeline to maximize recovery.
3. Underinsured Motorist (UIM) Coverage
If the at-fault driver’s limits are insufficient, your UIM coverage can bridge the gap. Michigan UIM pays you for economic losses—including rental costs—up to your policy limit. File a UIM claim once the tortfeasor’s insurer issues a limits check. See MCL 500.3115 for UIM requirements: MCL 500.3115.
4. Direct Lawsuit for Loss of Use
Michigan law recognizes a tort claim for loss-of-use damages. To succeed, you must prove:
- A reasonable rental rate (supported by market quotes or invoices).
- The duration your vehicle was unavailable.
- That you incurred a financial loss due to the accident.
File suit in small claims court if your total loss-of-use claim is under $6,500. For higher amounts, file in district court. Track your rental receipts, repair orders, and correspondence with insurers to build a strong case.
5. Settlement Negotiations and Documentation
When policy limits are maxed out, the at-fault driver may lack funds to pay additional judgments. During settlement talks, press your own insurers first (PIP, rental reimbursement, UIM) before seeking a balance from the defendant. Keep a detailed file of all expenses, communications, and statutory citations to support your claim.
Helpful Hints
- Notify your insurer promptly of the accident and your rental needs.
- Obtain multiple rental quotes to demonstrate a reasonable rate.
- Keep daily logs and all rental invoices.
- Review your auto policy for rental and UIM limits.
- Act quickly: small claims deadlines in Michigan are generally three years from the accident date (MCL 600.5805).
- Consult an attorney if damages exceed small claims limits or if the at-fault driver has no assets.