State guide · Midwest
Michigan subrogation law guide
Damages are reduced by the claimant's share of fault. If the claimant's fault is greater than the combined fault of everyone else, noneconomic damages are barred, but economic damages, including subrogated property losses, are still awarded in reduced form.
Michigan at a glanceMI
- Property damage
- 3 years
- Bodily injury
- 3 years
- Fault rule
- Modified, 51% bar
- Gov. notice
- 120 days
Overview
Michigan is the hardest no-fault state for auto subrogation and an ordinary negligence state for nearly everything else. The no-fault act abolishes most tort liability arising from use of an insured motor vehicle in Michigan, so PIP carriers have no general reimbursement right and collision carriers cannot pursue at-fault Michigan motorists for vehicle damage. What survives is narrow: the insured's mini-tort claim of up to $3,000 for uncovered vehicle damage on accidents after July 1, 2020, claims against owners of uninsured vehicles, out-of-state accidents, intentional harm, and property protection insurance (PPI) of up to $1 million for buildings, fences, parked vehicles and other property, which must be pursued within 1 year of the accident (MCL 500.3145). Outside auto, Michigan offers a 3-year tort period, a 6-year contract period, and a fault statute that reduces but never bars economic damages. The offsets are several-only liability, a commercial economic loss doctrine, and governmental notice periods as short as 45 days.
Quick reference with citations
- Property damage SOL
- 3 years
- MCL 600.5805(2)
- Bodily injury SOL
- 3 years
- MCL 600.5805(2)
- Product liability
- 3 years (MCL 600.5805). No general product statute of repose; architects, engineers and contractors on improvements to real property have a 6-year repose with a 10-year outer limit (MCL 600.5839).
- Written contract
- 6 years
- Contract and indemnity recoveries
- Comparative fault rule
- Modified, 51% bar
- MCL 600.2959; MCL 500.3135 (auto mini-tort and noneconomic claims)
- Government notice of claim
- 120 days
- Governmental immunity is broad under the Governmental Tort Liability Act, and each exception carries its own notice rule: 120 days for highway defects (MCL 691.1404) and public building defects (MCL 691.1406), and 45 days from discovery for sewage disposal system backups (MCL 691.1419). Claims against the State require a verified claim or notice of intent filed with the Court of Claims within 6 months for property damage or personal injury (MCL 600.6431(4)).
Fault rule in practice
How Michigan's rule changes a $50,000 recovery.
Damages are reduced by the claimant's share of fault. If the claimant's fault is greater than the combined fault of everyone else, noneconomic damages are barred, but economic damages, including subrogated property losses, are still awarded in reduced form.
Authority: MCL 600.2959; MCL 500.3135 (auto mini-tort and noneconomic claims)
| Insured's share of fault | Recoverable in MI | Under pure comparative |
|---|---|---|
| 0% | $50,000 | $50,000 |
| 20% | $40,000 | $40,000 |
| 50% | $25,000 | $25,000 |
| 60% | Barred | $20,000 |
Doctrines that move the number
Michigan doctrine checklist.
Made-whole doctrine
Michigan has applied the made-whole rule since Washtenaw Mut. Fire Ins. Co. v. Budd: a property insurer takes nothing from a recovery that does not fully compensate the insured after attorney fees and costs. No Michigan appellate decision squarely holds that policy language can displace the rule. It plays no role in statutory no-fault recoveries.
Economic loss doctrine
Neibarger v. Universal Cooperatives, Inc. bars tort claims for economic loss arising from commercial sales of goods and leaves the purchaser to the UCC. A 2022 federal decision applied it to defeat a carrier's water supply line claim on a commercial building (Liberty Ins. Corp. v. LSP Products Group, Inc., 582 F. Supp. 3d 496 (E.D. Mich. 2022)). Consumer fire losses generally remain in tort; plead warranty counts inside the 4-year UCC period (MCL 440.2725).
Joint and several liability
Liability is several only in most tort actions (MCL 600.2956; MCL 600.6304), with narrow exceptions such as medical malpractice claims by a plaintiff free of fault. Each defendant pays only its allocated share, and fault can be allocated to nonparties after a timely notice under MCR 2.112(K).
Anti-subrogation and waiver
A residential tenant is a co-insured under the landlord's fire policy for negligence claims (New Hampshire Ins. Group v. Labombard), but a lease clause making the tenant liable for any damage it causes supports a contract-based recovery (Laurel Woods Apartments v. Roumayah, 734 N.W.2d 217 (Mich. Ct. App. 2007)).
Practice notes
Working Michigan subrogation files.
- 1
Triage Michigan auto files by exception, not by fault. Vehicle damage between Michigan-insured motorists is closed to the collision carrier; the insured keeps a mini-tort claim of up to $3,000 for uncovered damage such as the deductible, and a claimant more than 50% at fault gets nothing. Pursue full value only where the adverse vehicle was uninsured, the accident happened outside Michigan, the harm was intentional, or a non-motorist such as a parts manufacturer caused the loss.
- 2
When a vehicle strikes an insured building, fence or properly parked car, the recovery route is property protection insurance under the at-fault vehicle's no-fault policy (MCL 500.3121), not a negligence suit. The action must be commenced within 1 year of the accident (MCL 500.3145), far inside the 3-year tort period. Treat that 1-year date as the controlling deadline on every vehicle-into-structure property file.
- 3
For subrogated property losses Michigan behaves like a pure comparative state. On an $80,000 commercial fire traced to an electrician's panel work, an insured found 60% at fault for ignoring repeated breaker trips still recovers $32,000 in economic damages under MCL 600.2959. Because liability is several only, each defendant pays just its own share, so name every responsible contractor and answer nonparty fault notices promptly.
- 4
Sewer backup subrogation against a city or drain authority requires written notice to the agency within 45 days after the claimant discovered, or should have discovered, the damage (MCL 691.1419). Ishqkala flags Michigan water claims with backup, floor drain or main line language at FNOL and starts a 45-day clock from the reported discovery date, tracked separately from the 3-year tort SOL.
Key cases
Neibarger v. Universal Cooperatives, Inc.
439 Mich. 512; 486 N.W.2d 612 (1992)
Tort claims for economic loss caused by a defective product purchased for commercial purposes are governed exclusively by the UCC. It is the main defense to commercial property product subrogation in Michigan.
Washtenaw Mut. Fire Ins. Co. v. Budd
175 N.W. 231 (Mich. 1919)
A fire insurer had no share of the insured's recovery from the responsible party where the insured's loss, after fees and costs, exceeded what was recovered. It is the foundation of Michigan's made-whole rule.
New Hampshire Ins. Group v. Labombard
399 N.W.2d 527 (Mich. Ct. App. 1986)
A landlord's fire insurer could not pursue a negligent tenant as subrogee absent an express agreement, because landlord and tenant are co-insureds under the fire policy.
Inter-company arbitration
No-fault shrinks Michigan's auto docket at Arbitration Forums: inter-company collision claims between Michigan-insured vehicles largely disappear, and Michigan is not among the states a signatory can elect in AF's PIP agreement. AF stays useful for out-of-state accidents, vehicles insured and garaged elsewhere, and property subrogation between signatory carriers, with compulsory jurisdiction up to $100,000 in company-paid damages. Whatever the forum, calendar the 1-year PPI limit on any claim involving vehicle damage to a structure.
How Ishqkala applies this guide
MI rules, built into every score.
- Opportunities with a Michigan loss state are calendared against the 3 years property damage period or the 3 years bodily injury period, whichever controls the claim type.
- The insured's estimated fault share is applied under modified, 51% bar before recoverable dollars are scored.
- Files involving a public entity get a 120-day notice deadline that outranks the general SOL in the priority queue.
- Alerts fire at 180, 90, 45 and 15 days before the controlling deadline.
Other modified, 51% bar jurisdictions
FAQ
Michigan subrogation FAQ
3 years (MCL 600.5805(2)). A subrogating carrier generally takes the insured's claim subject to the same limitation period, usually measured from the date of loss.
Modified, 51% bar (MCL 600.2959; MCL 500.3135 (auto mini-tort and noneconomic claims)). Damages are reduced by the claimant's share of fault. If the claimant's fault is greater than the combined fault of everyone else, noneconomic damages are barred, but economic damages, including subrogated property losses, are still awarded in reduced form.
Governmental immunity is broad under the Governmental Tort Liability Act, and each exception carries its own notice rule: 120 days for highway defects (MCL 691.1404) and public building defects (MCL 691.1406), and 45 days from discovery for sewage disposal system backups (MCL 691.1419). Claims against the State require a verified claim or notice of intent filed with the Court of Claims within 6 months for property damage or personal injury (MCL 600.6431(4)).
Michigan has applied the made-whole rule since Washtenaw Mut. Fire Ins. Co. v. Budd: a property insurer takes nothing from a recovery that does not fully compensate the insured after attorney fees and costs. No Michigan appellate decision squarely holds that policy language can displace the rule. It plays no role in statutory no-fault recoveries.
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