Hello, I am happy to answer your question.
First let me give you some background on how the Michigan no fault insurance works:
When auto accidents occur in Michigan, there is a fairly good chance that one or both of the drivers involved is either uninsured or underinsured. In other words, the drivers are likely to have either no insurance, or very low limits.
For the victim, it could mean little or no compensation for a serious injury. For the driver who caused the accident, it could mean personal exposure of assets.
That is where uninsured and underinsured motorist coverage come into play. These coverages are designed to fill the gaps where an at-fault driver's coverage is lacking.
However, they are also the source of much misunderstanding in the insurance industry. Agents and other insurance practitioners need to understand the difference between the two types of coverage, how UM/UIM.
Uninsured Vs. Underinsured
The law requires minimum liability insurance coverage of $20,000 for one individual and $40,000 for more than one individual for bodily injury or death and $10,000 for property damage. However, some individuals get their license plates each year by paying the minimum insurance premium and then letting the coverage lapse for nonpayment. This is one reason why the risk of encountering an uninsured driver in Michigan is so high.
Uninsured motorist coverage (UM) was designed to provide a source of recovery when a driver without insurance causes harm. With UM coverage, the insurer pays the insured the damages the insured would have recovered had the other driver been insured, subject of course to the UM policy limit. Underinsured motorist coverage (UIM) goes one step further, allowing the insured victim to recover from his or her insurer damages sustained in an accident with an underinsured driver, or, put another way, a driver who has inadequate coverage to compensate for the injuries that are caused.
Contract Language Controls
Michigan's No-Fault Act does not require a driver to carry uninsured or underinsured motorist coverage. Therefore, when a driver does have such coverage, the terms of the insurance contract control.
To recover under an uninsured motorist policy, the claimant must show that the other driver was: 1) uninsured; and 2) legally at fault. If the claimant would not have been able to recover damages from the other driver, he or she will not be entitled to UM coverage.
To recover under an underinsured motorist policy, the claimant must first recover the full policy limit from the other driver. This precludes the claimant from accepting an amount less than the other driver's policy limit as a settlement.
Claimants should also note that they need the permission of the underlying UM/UIM carrier to settle with the wrongdoer, even when the wrongdoer is offering the full policy limits. In Spearman v. State Farm, for example, the Michigan Court of Appeals ruled that a plaintiff forfeited UM coverage where he settled his bodily injury claim with the owner without his UIM insurer's consent.
So, at this point you need to contact your insurance company and ask them for a full description of your coverage. You need to also ask them to move forward with your claim, because this is something that your insurance company will handle, not you. If you have the right type of coverage, they will bring the court action, you just need to cooperate with them so that it goes smoothly.
I hope this was helpful and good luck.