Getting injured in a car accident is a very traumatic experience. The good news is if you are injured in a motor vehicle accident, under the Michigan no-fault law a car insurance company is responsible for paying a number of benefits, including medical bills, lost wages, prescriptions and even compensation to friends or family helping you recover from the accident.
But an important question to consider is which car insurance company is responsible for paying these benefits? Most people think the at-fault driver’s insurance is responsible for paying no-fault benefits. But this is absolutely false. The Michigan no-fault is very specific in allocating which insurance company must pay for benefits. In the legal field, this is called order-of-priority.
The first place to start oddly enough is by looking at your own car insurance. Under the Michigan no-fault law, your own car insurance company is responsible for paying benefits. This is true even if you were hit by a drunk driver. Michigan is a no-fault state so for purposes of receiving first-party no-fault benefits – like lost wages – fault does not matter.
If you do not have car insurance – say you were a passenger in a car – the next place to look is a resident relative has car insurance. For example, if you live with your parents or your aunt on the date of the accident, and they had car insurance, their car insurance would be responsible for paying benefits.
Resident relative is an important term. The accident victim must be related and living with the person at the time of the accident. A fiancé or friend is not a resident relative. A married spouse on the other hand is a resident relative.
If nobody in the household has car insurance, then what matters is whether the car accident victim was an occupant (passenger) or non-occupant (pedestrian).
If the car accident victim occupied the vehicle at the time of the accident, and that person has no car insurance in the household, you look next to the owner of the vehicle. If the vehicle owner has car insurance, that insurance company must pay benefits. After that, you look at the driver’s car insurance company.
If the vehicle owner or the driver does not have car insurance, then the accident victim must go through the State of Michigan and what’s known the Michigan Automobile Insurance Placement Facility, better known as Assigned Claims. This organization, which is managed by the state will assign an insurance company to handle the claim.
PIP Priority – Occupant:
Under the no-fault law, the order of priority for insurance if the victim was inside the vehicle is as follows:
1) Your own auto insurance (client is the named insured)
2) Resident relative (a resident relative is not a live-in boyfriend or girlfriend, but is a spouse or typically a blood relative)
3) Owner of occupied vehicle
4) Auto insurance of driver of the vehicle, if none
5) Assigned Claims
If you were a non-occupant at the time of the accident – pedestrian or bicyclist – the rules are a little different. You still look to your own auto insurance or that of a resident relative first. After that, the owner of the motor vehicle involved is considered. If a motor vehicle involved in the accident is insured, that insurance company must pay benefits. If the owner of the vehicle does not have insurance, you next look to the driver of the motor vehicle involved.
If there still is no insurance, the accident victim must go through the Michigan Automobile Insurance Placement Facility (Assigned Claims) and the state will assign an insurance company to handle a claim.
PIP Priority – Non-Occupant:
1) Your own auto insurance
2) Resident relative
3) Owner of motor vehicle involved
4) Driver of motor vehicle involved, if none
5) Assigned Claims
The rules for motorcyclists are a little different.
In a motorcycle accident, you don’t turn to your own car insurance first. Instead, the first place to look is the owner of the motor vehicle involved in the accident. If the owner has insurance, that insurance company must pay benefits. If the car owner doesn’t have insurance, then the car insurance operator/driver of the motor vehicle involved must pay. If there is no car insurance there, only then do you look to the car insurance of the operator of the motorcycle to pay benefits. If the operator of the motorcycle has no car insurance, then you consider the owner of the motorcycle.
After that, if there still is no insurance, the accident victim must go through the Michigan Automobile Insurance Placement Facility (Assigned Claims) and the state will assign an insurance company to handle a claim.
There are two important things to be remember about motorcycle accidents. First, to be eligible for no-fault benefits, the motorcycle must be insured. The owner of a motorcycle is injured and his or her bike is uninsured, you cannot get no-fault benefits.
Second, motorcycles are not motor vehicles under Michigan law. The Michigan no-fault law only covers claims when a motor vehicle is involved. Therefore, only motorcycle accidents were a car or truck is actually involved in an accident are compensable under the Michigan no-fault law. So if a motorcyclist loses control of his bike because of a slippery road, that person cannot collect no-fault benefits.
PIP Priority – Motorcycle
1) Owner or registrant of motor vehicle involved
2) Driver of motor vehicle involved
3) Operator of motorcycle
4) Owner of motorcycle, in none
5) Assigned Claims
The Lee Steinberg Law Firm, P.C. has been handling Michigan no-fault cases for over 40 years. We are experts in this area of the law and can help you. Please call LEE FREE at 1-800-LEE-FREE or 1-800-533-3733 for a free consultation so we can answer all of your questions.