Which Car Insurance Pays No-Fault PIP Benefits (7 Rules) - Lee Steinberg Law Firm

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Which Car Insurance Pays No-Fault PIP Benefits (7 Rules)

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Do you wonder which car insurance company pays for no-fault benefits after a crash or wreck in Michigan? 

Michigan’s no-fault law is confusing. The at-fault driver does not automatically pay for things like medical bills, lost wages and out-of-pocket costs. But don’t worry. This article will help explain who pays when a car accident occurs in Michigan. 

When you get in a car or truck accident in Michigan, there are specific rules for which auto insurance company pays Michigan no-fault benefits. They are found under MCL 500.3114, MCL 500.3115 and other parts of the Michigan No-Fault Law. These rules are known as the “order of priority.” 

At the most basic level, the car insurance company that pays for Michigan no-fault benefits depends on whether you have auto insurance or live with someone who had car insurance at the time of the crash. However, even if you did not have car insurance at the time of the accident, you can still obtain no-fault benefits in almost all situations. 

What are Michigan Auto PIP Benefits?

PIP benefits are the medical benefits that cover injuries and medical treatment following a car or truck accident in Michigan. These benefits are known as personal injury protection benefits. They are named for the PIP coverage that almost all auto insurance policies have. 

PIP coverage acts like health insurance. Depending on the amount of coverage in the auto insurance policy, the car insurance company – such as Geico or Allstate – must pay the medical bills that health insurance does not cover. 

These medical expenses can include hospital bills, doctors’ bills, prescriptions, physical therapy, rehabilitation, surgery and even nursing care. PIP benefits are separate from compensation for pain and suffering. That usually comes from the at-fault driver’s auto insurance.

Who Pays for Medical Bills in A Car Accident? 

The basic rule is this. Under the law, your own car insurance pays your own no-fault claim. For example, if you are injured in a car accident and go to the hospital, and you are insured with Progressive Insurance, then Progressive Insurance must pay all medical expenses that health insurance does not pay related to the crash.  

If you do not have health insurance, or are on Medicare or Medicaid, then Progressive is primary for the payment of medical bills from a car accident. The amount of medical expenses Progressive must pay is capped at the amount of PIP coverage in the policy. 

Before July 2020, everyone had unlimited PIP. But that is no longer the case. Now people can purchase different amounts of PIP coverage. The minimum amount of PIP coverage in most circumstances is $250,000. However, some folks who meet certain criteria can purchases less PIP coverage, or even opt-out of PIP coverage entirely. I highly recommend you do not do this! 

Who Pays PIP Benefits If I Don’t Have Car Insurance?

If you do not have auto insurance of your own at the time of the crash, then you must turn to the auto insurance carrier of your spouse or a resident relative who has auto insurance. 

For example, you are in a passenger in a friend’s vehicle that ran a red light and crashed. You do not own a car. However, you live with your sister who owns a car and she insures it with Farm Bureau. Under this scenario, Farm Bureau must pay your medical bills from the crash. This is the case even though your sister and her vehicle were not involved in the accident.

The key is you must be a resident relative of the person who has auto insurance to qualify. This means you must be domiciled in the same household and have some sort of family relationship, by blood or marriage, on the date of the crash. Relatives can include parents, children, siblings, aunts, uncles, step-parents, even cousins. 

There is one caveat to this rule, however. If you are involved in a crash with your own vehicle, and that vehicle is uninsured, then you cannot make a claim for no-fault PIP benefits. In fact, you can’t even file a lawsuit for pain and suffering if the other person caused the wreck. 

The penalties for driving around your own uninsured vehicle are severe. Not only can you get a ticket failing to show proof of insurance, but you lose your rights for all PIP benefits and pain and suffering. That is why it is so important to make sure your car has insurance! 

What If There Is No Car Insurance In My Household?

If you don’t have car insurance, and no resident relative has auto insurance, you still can make a PIP claim. Under this scenario, an injured person with medical expenses turns to the Michigan Automobile Insurance Placement Facility (MAIPF). This organization is run by the car insurance industry with oversight by the State of Michigan. It is made up of car insurance companies. The MAIPF runs the Michigan Assigned Claims Plan (MACP). 

Under the law, a person who wants to receive no-fault benefits and doesn’t qualify under their own policy, or the policy of a resident relative, must file an Application for Benefits with the MACP. This application is then processed by the MACP. The MACP will then assign an insurance company to pay the no-fault benefits. 

The current servicing insurers for the MACP are the following:

  • Allstate Insurance
  • AAA Insurance (The Auto Club)
  • Citizens Insurance (Hanover Insurance Company)
  • Farmers Insurance
  • Farm Bureau Insurance
  • Nationwide

All claims filed with the MACP are capped at $250,000 in PIP benefits. 

Who Pays For Medical Bills In A Motorcycle Accident? 

The order of priority for motorcycle crashes and wrecks is totally different. In general, it is the following:

  1. The insurance company of the owner of the motor vehicle involved in the accident.
  2. The insurance company of the driver of the motor vehicle involved in the accident.
  3. The car insurance of the operator of the motorcycle involved in the accident.
  4. The car insurance of the owner of the motorcycle involved in the accident.
  5. The Michigan Assigned Claims Plan (MACP) 

That is the order. However, there are two conditions a person injured in a motorcycle accident must meet to be eligible for any PIP no-fault benefits.

First, a motor vehicle – such as a car or truck – must “show evidence of involvement” in the accident with the motorcycle. Remember, PIP benefits are only available to people injured in a “motor vehicle” accident. Motorcycles are not motor vehicles under the law. As a result, a motor vehicle must be involved in the crash. “Involvement” is a loose term, and it is important to talk to a Michigan motorcycle accident lawyer following a crash to see if you are eligible for no-fault benefits. 

Second, if you are the owner of the motorcycle involved in the accident, you must maintain liability insurance on the bike at the time of the crash. If your motorcycle was uninsured at the time of the accident, you are not eligible for any PIP benefits. However, you can still get pain and suffering if the other motorist was at-fault. 

Who Pays For Medical Bills If I’m in My Employer’s Vehicle? 

Under MCL 500.3114(3), an employee, his or her spouse, or a resident relative who is injured in a motor vehicle crash while inside a car or truck owned by the employer must receive PIP benefits from the employer’s auto insurance company. They are first to pay even if you have your own auto insurance. 

For example, say you are in a Ford F150 that your boss owns. A person runs a red light and crashes into the side of the truck. Your boss insures the vehicle with State Farm. State Farm is responsible for paying the no-fault benefits. This is the case even if you have personal auto insurance with Cure Insurance. 

However, be aware that work accidents usually involve worker’s compensation. Worker’s compensation is primary for the payment of work accident injuries. That’s why it is smart to contact a Michigan car accident lawyer after a car crash involving a work vehicle or a crash that occurred on the job.  

Who Pays the Medical Expenses If I’m in a Bus Crash? 

Bus crashes are a special type of case. They fall within the same category as taxi cabs, school bus accidents, Greyhound crashes, or bus’s operated by a nonprofit operation. In this scenario, your own car insurance or the insurance of a resident relatives pays the no-fault claim, including medical bills. 

However, if the injured person does not have auto insurance, and there is no car insurance in the household, then car insurance for the bus or taxi must pick up the tab and pay the claim. The amount of PIP benefits available depends on the amount of PIP coverage the owner of that bus or tax selects. In most situations, it is $250,000 in PIP benefits.  

Who Pays the Medical Bills If I’m in a Uber or Lyft?

If you are injured in a car crash while a passenger in an Uber or Lyft, you still always start with your own car insurance carrier first. Your own auto insurance will pay the medical expenses up to your PIP coverage limit. The insurance for Uber of Lyft is not responsible for the payment of medical bills, lost wages and other no-fault benefits unless you do not have auto insurance and no resident relatives have auto insurance. Only then does the car insurance for the Uber or Lyft driver pay your medical bills and PIP claim. 

Remember, PIP benefits are not the same as pain and suffering benefits. If an Uber driver caused the crash, the insurance company for the Uber driver is responsible for paying pain and suffering. What I am discussing only pertains to PIP benefits.  

The Michigan No-Fault Lawyers Who Can Help

Don’t let the confusion of the Michigan no-fault law prevent you from getting the benefits and money you deserve. Contact the smart and experienced Michigan car accident attorneys at the Lee Steinberg Law Firm, P.C. so your questions can be answered. 

Our team of Michigan car crash lawyers are standing by, waiting to answer any questions you have about the crash and the insurance claim. Call us at 1-800-LEE-FREE (1-800-533-3733) any time. And like always, there is never a fee or any costs until we win your case.