5 Instances Where Michigan Drivers Can Lose Their No-Fault Benefits
Entitlement to Michigan no-fault benefits following a Michigan car accident is the foundation of Michigan car accident law. Under the Michigan No-Fault Law, almost all individuals accidentally injured in a Michigan car wreck are entitled to certain no-fault benefits. These benefits are generous and include wage loss benefits and the payment of all medical expenses related to an injured person’s care, recovery and rehabilitation. They also include reimbursement for prescriptions, medical mileage and payment to family members or other individuals providing replacement services and attendant care.
Under the law, these benefits are available to just about everybody. But there are some specific exceptions. This article is about those individuals involved in a Michigan car accident – whether in Detroit, Grand Rapids, Traverse City or somewhere in between – but are disqualified from obtaining Michigan no-fault PIP benefits.
The individuals disqualified from obtaining Michigan no-fault benefits is described by statute, specifically MCL 500.3113. Under this law, a person is not entitled to be paid personal protection insurance benefits – also known as no-fault PIP benefits – for accidental bodily injury if at the time of the car accident certain circumstances existed. There are five general exceptions.
The first exception is the infamous “joyriding” exception. It says “a person willingly operating or willingly using a motor vehicle or motorcycle that was taken unlawfully, and the person knew or should have known that the motor vehicle or motorcycle was taken unlawfully” is disqualified from getting no-fault benefits. In other words, persons who have stolen a car, or even taken a car without the owner’s permission, and are injured in a car accident, are not permitted to apply for and obtain no-fault benefits.
This exception can also extend to passengers in a stolen vehicle. However, in denying benefits in such a situation, the insurance carrier must prove the passenger knew or should have known he or she was in a stolen vehicle when the accident occurred.
The second exception is the most important because it easily affects the most people. Under MCL 500.3113(b), the owner or registrant of the motor vehicle or motorcycle involved in the accident must have car or motorcycle insurance at the time of the accident. So, if you are the title owner of a car, or even the registered owner, and you don’t have car insurance for the vehicle involved in the car accident, you cannot make a claim for no-fault benefits. In other words, uninsured owners in a car accident involving their uninsured vehicle cannot claim benefits.
This exception also encompasses “constructive owners” of motor vehicles. A constructive owner is an individual who isn’t a title or registered owner, but is deemed an owner due to their proprietary or possessory usage of a vehicle for a period longer than 30 days. In such a situation, a constructive owner must carry car insurance or be disqualified from getting benefits if injured in a car accident.
This exception is especially important due to the huge number of uninsured drivers operating vehicles on Michigan roadways.
The third exception refers to non-Michigan residents. Under this disqualification, a person who is a non-Michigan resident, was an occupant of a car, truck or motorcycle not registered in Michigan, and the car, truck or motorcycle was not insured by an insurer that has filed a MCL 500.3163 certificate to sell Michigan no-fault insurance, is not entitled to PIP benefits.
Non-Michigan based insurance companies, such as State Farm and Allstate, are examples of 3163 insurers because they are authorized to transact car insurance in Michigan. As such, an out-of-state policy – like an Ohio Allstate insurance policy – automatically transforms into a Michigan no-fault policy when a non-resident is operating their car in Michigan.
In short, this exception involves out-of-state visitors in a non-Michigan car that is insured with an out-of-state carrier who doesn’t write Michigan no-fault insurance.
The fourth exception was recently added and has become a new way for Michigan car insurance carriers to deny coverage. This exception states that a person listed as an excluded driver for a motor vehicle or motorcycle he or she is operating at the time of the accident is not entitled to no-fault benefits. For example, if a boyfriend is an excluded driver on an auto policy for a Dodge Camaro, and that boyfriend gets involved in a car accident while driving the Dodge Camaro, he cannot turn to the car insurance company that provides insurance coverage for PIP benefits.
The last disqualification is also new and is known as the “Uber” exclusion. It states a person who was “the owner or operator of a motor vehicle for which coverage was excluded under a policy exclusion authorized under section 3017” is not eligible for no-fault benefits. Under MCL 500.3017, an auto insurance carrier can exclude coverage for accidents when transportation network company drivers are logged on to a transportation network digital network or drivers are providing a prearranged ride using the network.
In simple terms, auto insurance carriers may exclude Uber and Lyft drivers from obtaining no-fault benefits following a crash when they are using a digital network app to provide rides for customers. As a result, it is essential that Uber and Lyft drivers obtain separate auto insurance when they are working and providing rides. Relying upon a standard personal auto policy to provide coverage while working is a big mistake.
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The Michigan no-fault law provides an array of benefits. These benefits, like wage loss and the payment of medical expenses, are essential for many people who suffered serious injury following a car wreck. Almost all individuals are entitled to such benefits. However, there are exceptions as described above.
If you have any questions about Michigan car accident law, please give our dedicated team of legal professionals a call 1-800 LEE-FREE (1-800-533-3733) anytime. We will happily answer any questions you have.