Michigan's no-fault law shrinks the usual diminished value claim in Michigan to a small, capped lawsuit. Most suits over car damage against a driver with valid insurance are off the table, with one narrow exception.
No-Fault Leaves Only the Mini-Tort
Under MCL 500.3135, tort liability for the use of an insured car is abolished, apart from a short list of exceptions. One exception is known as the mini-tort. For crashes after July 1, 2020, it allows damages up to $3,000 to a motor vehicle, to the extent insurance does not cover them.
That gap is where lost value would have to fit. The Matthiesen, Wickert & Lehrer survey found no Michigan decision on lost value in a claim against another driver. So the idea is open, and the dollar ceiling is low. Bring a written appraisal if you try it.
Your Own Policy and the Driscoll Ruling
A claim on your own coverage looks weak. In Driscoll v. State Farm, from 2002, a federal court applied Michigan law to a policy that promised to repair or replace. It held the insurer did not have to pay for the drop in value caused by the accident. Unless your policy says more, expect the repair and nothing else.
More Than Half at Fault Gets Nothing
The mini-tort has its own fault rule in section 3135. Damages must not be assessed in favor of a party who is more than 50% at fault. If you were 50% at fault or less, you can still bring the claim. A ticket, a police report and photos of where the cars ended up can help keep your share low.
Small Claims and the Three-Year Clock
The statute also picks the court. A mini-tort action must be started in the small claims division of the district court or the municipal court whenever that is legally possible. Under MCL 600.8401, the small claims limit is $7,000 beginning January 1, 2024, so a $3,000 claim fits easily.
The deadline is set by MCL 600.5805. For injury to property, you get 3 years after the injury. Few mini-tort claims need that long, but the rule is there.
If an insurer handles your claim badly, file with the Michigan Department of Insurance and Financial Services. For states that allow full lost value claims, see the state law table.