As an attorney in Michigan I am often asked about Michigan’s Auto No-Fault Law. This is natural because people who have been injured in a motor vehicle accident need to know their rights. However, because of the specialized and technical language in the law, people can be overwhelmed with “information overload”. The following are some of the most frequently asked questions and their answers in plain english.
I was involved in a car accident and my insurance company keeps talking about first party and third party benefits. What do these terms mean?
The Michigan No-fault Act provides for two broad divisions of claims; “economic” and “non-economic.” “Non-economic” loss is commonly referred to as pain and suffering or “third party” damages because they are paid by someone other than the insurance company. Economic loss is called “first party” coverage, no-fault or “PIP” benefits. These benefits are paid by your insurance company.
What is required to bring a Non-Economic Damages claim ( also known as a “pain and suffering” claim)?
Another driver must be more than 50% at fault in the accident.
The victim must suffer a “serious impairment of a body function, or a serious and permanent disfigurement or death”.
A physician must indicate that the accident was, more likely than not, the cause of your injuries.
You must not have intentionally caused the accident.
Am I eligible for no-fault benefits?
Benefits are provided for any person involved in a motor vehicle accident, even if you were at-fault for causing the accident. If you were injured while riding in a motor vehicle, or were hit by a motor vehicle while on a motorcycle, bike or as a pedestrian, you are entitled to no-fault benefits. This is true even if you don’t have your own car insurance. There is an exception to this rule for uninsured drivers however. If you were driving your own uninsured motor vehicle at the time of the accident, you may not be eligible. Please consult with an attorney to determine your eligibility for benefits.
How do I make a no-fault claim?
Contact your insurance agent or the claim reporting center and let them know you have been involved in an accident. An adjuster should contact you within a few days and explain no-fault benefits to you. After this initial contact, you should receive an “Application for No-Fault Benefits” form. Complete this form and return it to the claims adjuster. This form must be submitted to your insurance company within one year of the accident in order for you to obtain benefits.
Are motorcycle accidents covered by no-fault?
Only if a motor vehicle is involved in the accident. Motorcycles and snowmobiles are not considered motor vehicles. If a motorcycle collides with a tree or flips over, there is no no-fault coverage. However, if a motorcycle is hit by a car or truck, then a motor vehicle is involved and there is no-fault coverage.
What if a pedestrian was hit by a motor vehicle?
Many people are under the impression that, in order to be entitled to no-fault benefits, an injury victim must have paid for these benefits in the form of purchasing a no-fault policy. The general rule should be understood: Everybody injured in a motor vehicle accident is covered by no-fault. Note the exception above to this rule for uninsured drivers.
I did not have insurance on my vehicle when I was involved in a motor vehicle accident. Am I still entitled to no-fault benefits?
An uninsured passenger or pedestrian is entitled to no-fault benefits. If you are the owner of the uninsured motor vehicle involved in the accident then you are not entitled to no-fault benefits.
What are the benefits that I am entitled to under no-fault?
Below is a basic summary of benefits no-fault benefits:
- Wage loss up to three years, subject to a statutory maximum which changes every year.
- Medical expenses, including hospital and doctor bills
- Medically related mileage
- Replacement Services up to $20.00 per day for three years
- Attendant Care services (even if provided by family members)
- Survivor’s Loss Benefits
(Please consult with an attorney for additional information regarding specific benefits)
What are the limits on medical expenses?
There is no dollar limit on the amount of money a no-fault insurer must pay for accident related treatment. Medical expenses must only be reasonable and necessary for your care, recovery or rehabilitation. This is a lifetime benefit.
What is the difference between Replacement Services and Attendant Care Services?
Replacement Services are available for up to three years from the accident date and are limited to $20/day. This benefit is for services that the injured person would have performed had he/she not been injured. Replacement services would be available for mowing the lawn, doing laundry, dishes, taking out the garbage and other household chores and daily activities.
Attendant Care Benefits are not limited in duration or amount. Attendant Care Benefits are for personal care services, for example personal hygiene. Further, attendant care benefits are paid on an hourly basis and your doctor will help decide this.
How long do I have to wait for the insurance company to pay my claim?
Claims submitted with reasonable proof must be paid within 30 days. If the insurance carrier feels reasonable proof was not submitted, they must inform you in writing within 30 days of your submission. Properly submitted claims that remain unpaid after 30 days are considered overdue and bear simple interest at 12% as a penalty against the insurer. If the insurer unreasonably delays or refuses to pay, they may be subject to a penalty attorney fee as well.
