Which car insurance company is responsibly for paying my claim? That’s an important questions. The Michigan No-Fault Law provides a framework for determining which insurance company is responsible for paying no-fault benefits. This is often referred to as the “order of priority.” The insurance company responsible for paying has the “highest” order of priority.
Many factors are important in determining which insurance company is responsible for paying benefits. Important factors include where you live or are “domiciled”, whether you were inside or outside a vehicle at the time of the accident, whether you were in an employer’s vehicle, whether you were on a motorcycle as well as other considerations.
The following is a breakdown of the order of priority based on some of the above factors.
PIP Priority – Occupant:
Under the no-fault law, the order of priority for insurance if the claimant was inside or occupied the vehicle is as follows:
- Your own auto insurance (claimant is the named insured)
- Resident relative (a resident relative is not a live-in boyfriend or girlfriend, but is a spouse or typically a blood relative)
- Owner of occupied vehicle
- Auto insurance of driver of the vehicle, if none
- Assigned Claims Plan
So if you are occupied a vehicle at the time of the accident, this is the order of priority. First you start with your own car insurance. That insurance company is the first in line. If you are injured, and you have AAA Insurance, that insurer pays the claim. End of discussion.
If you don’t have insurance though, you go to the insurer of a resident relative (blood related). So if you don’t have car insurance, but you live with Uncle Ned and he is insured with State Farm, that insurer must pay the claim. After that, you go to the owner of the occupied vehicle. If the owner is insured, that company is responsible for paying the benefits. If the vehicle is uninsured, the insurer of the driver of the vehicle at the time of the accident is next in line to pay.
If there no insurance at that level, then the claimant must go through the Assigned Claims Plan. This Plan, which was created by the legislature, basically means the State of Michigan will assign a car insurance carrier to handle and pay your claim. To get an insurance carrier assigned, an application must be completed.
PIP Priority – Non-Occupant:
If you are injured and you were not an occupant of a motor vehicle at the time of the accident, this is the order of priority:
- Your own auto insurance
- Resident relative
- Owner of motor vehicle involved
- Driver of motor vehicle involved, if none
- Assigned Claims
As you will notice, this order is very similar to claimants who were occupants at the time of the crash. First, you start with your own insurance company and then you go to a resident relative’s. Then you go to the owner of the motor vehicle involved. If the vehicle was uninsured, you then must check to see if the driver of the vehicle had car insurance because that carrier would be first in line to pay the claim. After that, again the Michigan Assigned Claims Plan gets involved.
PIP Priority – Motorcycle:
The following is the order of priority for motorcycle accident claims. Please notice the big differences when compared to standard motor vehicle accidents:
- Owner or registrant of motor vehicle involved
- Driver of motor vehicle involved
- Operator of motorcycle
- Owner of motorcycle, in none
- Assigned Claims
Unlike claims involving only a motor vehicle, motorcycle accident claims start with the owner or registrant of the motor vehicle involved, not your own car insurance. If for some reason that owner is not insured, the car insurance company for the driver of the motor vehicle would be responsible.
If there is no coverage at that level, only then do you go to your own car insurance carrier. Again, as a last resort the State of Michigan will assigned an insurance carrier to pay the claim through the Assigned Claims Plan.
Cases involving an employer’s vehicle are difference. Typically the standard rules of priority are ignored. Instead, the insurer of the furnished vehicle is responsible for the claim. So if your boss gave you the company car to complete a work task, and the accident occurred within the scope of employment, your boss’s car insurance company must pay.
Vehicles For Hire:
Cases involving vehicles for hire – city buses, school buses, taxis, limos – are somewhat confusing. The statute says the car insurance carriers for the motor vehicles are responsible for paying the claim. However, the statute has an exception that basically swallows the rule. For example, if you are riding a school bus or city bus, and you have car insurance of your own, your car insurance carrier would be first in line, not the carrier for the bus.
The order of priority is a very important part of the Michigan No-Fault Law. Knowing which car insurance company is responsible for paying no-fault benefits is essential. If you or a loved one has any questions about which car insurance company should pay, please call our office toll free at 1-800-LEE-FREE (1-800-533-3733). We are here to help and we can make sure your benefits get paid.