Michigan No-Fault Explained

Michigan’s no-fault law can be divided into two types of cases, first-party and third-party (uninsured motorist coverage).

First-party:  A first-party case is between the auto accident victim and his/her insurance company for no-fault benefits, also called personal injury (PIP) benefits. These benefits include medical expenses related to the auto accident, wage loss for the first three years following the accident, household replacement services (chores/help around the house), payment for mileage to and from medical appointments and attendant care (nursing services).

If you do not have your own insurance, there are situations when an insurance company will pay benefits.  If you live with a relative that has auto insurance, that company may pay benefits.  Also, the insurance company for the driver/owner of a vehicle you are in, may be responsible for benefits.  Additionally, benefits may be available from the Assigned Claims Facility. We are available to assist in determining the proper insurance company for first party benefits.

There are two important steps you must take to secure your benefits in a first-party case. First, you must immediately file a no-fault application for benefits with the applicable insurance carrier. This application MUST be filed within one (1) year from the date of the accident, or you will forever lose any benefits to which you might be entitled.

Secondly, if there are any medical bills or other benefits that are not paid by your insurance carrier, you must file a lawsuit for those particular items within one (1) year from the date the expenses were incurred. If this lawsuit is not filed within that one-year period, you will lose all rights to reimbursement for those items.

Here is a breakdown of Michigan First Party PIP benefits:

Medical Expenses:  The medical expense provision of the Michigan no-fault law provides reimbursement for all medical expenses incurred due to your personal injuries from the auto accident. Based upon the type of insurance coverage involved, these may be coordinated benefits, which pay all expenses not covered by your basic health insurance; or full benefits, which pay all medical expenses incurred, even if those are paid by a health insurance provider. Medical expenses are a lifetime benefit, as long as the treatment is determined to be reasonable and necessary, and related to the accident.

Medical Mileage:  Part of the medical expense provision of the Michigan no-fault act provides for reimbursement of transportation expenses, including expenses for mileage to and from doctors’ offices, hospitals and rehabilitation/therapy clinics.  Please keep a detailed record of your mileage expenses and submit them to the insurance company along with your other medical bills. If you are unable to drive as result of your injuries, insurance companies may pay for transportation services by licensed companies.

Wage Loss:  The wage loss provision of the Michigan no-fault law will reimburse you for 85 percent of your gross wages up to a statutory monthly maximum that is adjusted every year. Wage loss is payable for three years from the date of the accident, as long as your physician determines you are unable to work as a result of the injuries from your accident.

Household Replacement Services: The replacement services provision of the Michigan no-fault act will pay up to $20 a day for any services you performed prior to the accident and now must hire someone else to do because of your auto accident injuries. Replacement services can be performed by family members and may include housekeeping, cooking, lawn and garden maintenance, laundry,  baby-sitting/child care and other household duties.

Attendant Care:  Pursuant to the Michigan no-fault act, attendant care benefits are recoverable in the event of serious injuries from an auto accident. Attendant care benefits are also referred to as nursing services, and are defined as “activities of daily living,” such as monitoring and supervision for safety reasons, administering medication, bathing, dressing, ambulation, styling/combing of hair,  grooming, help using the toilet, driving the patient, obtaining things for the patient, carrying and lifting things for the patient, and wound care. Attendant care can be performed by nurses, as well as family members, friends, or guardians. Individuals who perform the attendant care services are entitled to compensation on an hourly basis.

Third-party/ Uninsured motorist coverage:  A third-party case is between the auto accident victim and the at fault driver. In a third-party case, the auto accident victim sues the at-fault driver for pain and suffering damages, and excess economic damages. In a third-party case, damages are usually paid out from the at fault driver/owner’s insurance company. However, if the at fault vehicle does not have the required automobile insurance, you may assert an uninsured motorist claim against the insurance company of the vehicle you are in or your own insurance company.

If the automobile accident took place more than three (3) years ago, the victim cannot sue the other driver/owner or the other driver’s insurance company for pain and suffering.  The only exception is for minors that have until one year after his/her 18th birthday to file a pain and suffering lawsuit.