On May 30, 2019, Governor Whitmer signed a major overhaul to the Michigan no-fault system, completely transforming Michigan car accident law. The legislation took effect on June 11, 2019 as Public Act 21 of 2019. There a number of huge ramifications for Michigan drivers, their families and anyone who uses a car, truck or motorcycle in this state.
Over the past year, I have been writing about these changes and the effects they will have on all of us. The new law becomes effective in different stages, so the effects will be incremental over time. Please call our office at 1-800 LEE-FREE (1-800-533-3733) with any questions about the new law. Our dedicated staff of Michigan car accident lawyers, paralegals and staff members are here to help.
This bulletin will discuss the Michigan Assigned Claims Plan and changes to the way the Plan will handle car accident cases and pay claims.
What is the Michigan Assigned Claims Plan?
First, a brief overview. The Michigan Assigned Claims Plan (MACP) is a plan administered and run by the Michigan automobile insurance placement facility, an organization run by the state of Michigan but controlled by the insurance industry. The Plan basically acts as an insurance company of last resort for Michigan no-fault PIP claims.
Under Michigan law, if a person is injured in a car or truck accident, that person is entitled to receive no-fault benefits. These benefits include the payment of medical expenses, the payment of lost wages, and other benefits. An injured goes through their own auto insurance company for the payment of these PIP benefits. But if the person doesn’t have car insurance or doesn’t live with a resident relative who has car insurance, then under the new law, the injured person must go through the MACP for the payment of benefits. And the MACP must assign an insurance company, like Allstate or Farm Bureau, to pay the claim.
A person claiming through the MACP must notify the Michigan automobile insurance placement facility of their claim within 1 year after the date of the accident. But there are very specific requirements and hurdles to get money from the MACP.
How Do You Get Money from the Michigan Assigned Claims Plan
To the process started the injured individual must submit an application on a form provided by the MACP. The application be found here. The application is very extensive. What was once only a few questions has turned into a very detailed, long, intrusive and confusing application process. In addition, reasonable proof of the loss must also be provided to the MACP. With the new law, it is unclear what exactly “reasonable loss” means.
Regardless, within 60 days of receiving the application, the MACP, or the insurance carrier assigned to handle the claim, is supposed to specify in writing what additional information it needs to move forward with process the claim.
Once the MACP determines the applicant is eligible to receive PIP benefits, the MACP is supposed to promptly assign the claim to an insurance carrier and notify the claimant the name and address of the insurer.
When the claim is assigned to the insurance carrier, an insurance adjuster for the insurance company will be in contact with the claimant or his/her attorney. At this point, two things usually happen. First, the adjuster will request an interview with the claimant, usually through a company called Data Surveys. A representative from Data Surveys will do an in-person interview. Theses interviews should be non-recorded. They are a way for the insurance company to find out about your injuries, your background, the medical treatment you have been receiving and why.
Sometimes, the insurance company will order the claimant to attend an Examination Under Oath, or EUO. EUOs are a lot like a deposition. It is conducted by an attorney hired by the insurance company and done under oath. Previously, EUOs were not mandatory. Under the new law, an injured person making a claim for benefits must attend an EUO if asked. Claimants should have their attorney present with them during an EUO.
EUOs are very important. They are a tool used by the insurance company and their attorneys to deny claims. They will look for fraud, misstatements and any nook and cranny to get out of paying benefits.
From the outset a claim is opened, the injured person or his/her attorneys should be forwarded proof of the outstanding benefits being claimed. This should include outstanding hospital bills, doctor’s bills, proof of lost wages in the form of pay stubs, disability scripts from doctors outlining the injured person’s restrictions, as well as other documentation. This paperwork must be turned over to the insurance company on a consistent basis.
What are Some of the Major Changes with Michigan Assigned Claims Under the New Law
Perhaps the biggest change is the $250,000 cap. Under the old rules, there was no cap on PIP benefits for MACP cases. If you had a $1,000,000 in medical bills, the insurance company assigned to pay the claim had to pay it. That is no longer the case. All MACP cases going forward will have a $250,000 limit for all PIP benefits, including medical bills and lost wages.
In addition, under the new law individuals on Medicare can completely opt-out of purchasing all PIP benefits, if they meet the eligibility requirements. The folks that opt out, and then are injured in an accident while occupying a motor vehicle, are not entitled to claim PIP benefits through the MACP. There is one very narrow exception, but the reality is Medicare folks who choose not to have PIP coverage are leaving themselves open to a world of unpaid medical bills and uncertainty if they are hurt in a bad crash.
Claimants now also have a duty to cooperate with the MACP. Benefits may be suspended if an injured person “fails to cooperate” with the MACP, such as by failing to attend to an examination under oath.
Another change is the penalties insurance carriers face for not paying valid claims under the MACP. Under the old rules, insurance carrier had to pay penalty interest if they were failed to timely pay a benefit (which was within 30 days of receiving the proof of loss and the amount sustained). This threat of penalty interest was often the reason claims got paid. Under the new law, the threat of having to pay penalty interest has been effectively removed. This is a huge gift to the insurance industry, who were the main drafters of the new law.
Michigan Assigned Claims cases are complex. An experienced and dedicated Michigan car accident lawyer can walk you through the process and ensure the insurance company does not take advantage of you and your situation. Please call us at 1-800-LEE-FREE (1-800-533-3733) with any questions. The call is free and we don’t charge a cent until we win your case.