State law · MI

Michigan diminished value claims

Only in a limited way. Michigan's no-fault law abolishes most lawsuits against at-fault drivers for vehicle damage. What remains is the 'mini-tort': up to $3,000 (for accidents after July 1, 2020) for vehicle damage your insurance does not cover, usually in small claims court. Diminished value may fit within that cap, but no appellate ruling confirming this was found.

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Claim against the at-fault driver
Limited
Claim against your own insurer
Unsettled
Time limit to sue for property damage
3 years
Insurance regulator
Michigan Department of Insurance and Financial Services

Reviewed by Monica Fisher, Owner, Licensed Auto Appraiser and Court Expert Witness — appraisal perspective, not legal advice

Last reviewed October 4, 2026

Michigan law

What Michigan law says about diminished value

Third-party claim

Against the at-fault driver’s insurer

Limited

For an in-state accident where the at-fault vehicle was insured, the only claim for vehicle damage is the mini-tort. It allows up to $3,000 for 'damages to a motor vehicle' not covered by insurance, and nothing if you were more than 50% at fault or your vehicle was uninsured. Whether diminished value counts within the cap was not addressed in any appellate opinion found. The at-fault driver's insurer pays only if the driver bought optional mini-tort coverage.

Authority: MCL 500.3135(3)(e) and (4)

First-party claim

Against your own insurer

Unsettled

No Michigan appellate decision on whether collision coverage includes diminished value was located. In practice it depends on your policy's wording, and many policies limit payment to repair or replacement cost.

Statutes and rules

MCL 500.3135(3)(e) and (4): No-fault tort limits; mini-tort
Abolishes tort liability for in-state use of an insured motor vehicle, with exceptions. The mini-tort exception allows up to $3,000 (accidents after July 1, 2020; $1,000 before) in vehicle damage not covered by insurance. Comparative fault applies, with no recovery above 50% fault or if your vehicle lacked required security. Suits go to small claims when possible, and the claim is not part of mandatory residual liability coverage.
MCL 600.5805(2): Three-year limitation for injury to property
Actions to recover damages for injury to a person or property must be brought within 3 years.
MCL 500.3009(1), (5): Liability limits
After July 1, 2020, the default bodily-injury limits are $250,000/$500,000. Insureds may choose lower limits, but not below $50,000/$100,000. Property damage is at least $10,000.

Deadlines and minimum coverage

Time limit for a property-damage lawsuit: 3 years (MCL 600.5805(2)). This applies to mini-tort and other property-damage tort claims. Claims under your own policy follow the policy's terms and contract-law periods, which were not researched.
Minimum liability insurance: $50,000 per person / $100,000 per accident bodily injury; $10,000 property damage. After July 1, 2020 (2019 no-fault reform). $50k/$100k is the lowest selectable limit; the default is $250k/$500k. The at-fault driver’s property-damage limit can cap what their insurer pays.
If your claim stalls: You can file a complaint with the Michigan Department of Insurance and Financial Services (DIFS).

Sources

Researched September 30, 2026. General information from an appraisal perspective, not legal advice.

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