Understanding No-Fault Insurance in Detroit – What You Need to Know After a Car Accident
Navigating and figuring out what to do after a car accident in Detroit can be daunting. In addition to the injuries, medical bills, vehicle damage and chaos, a person must understand the basic intricacies of the no-fault insurance law. This post aims to provide comprehensive insight into what you need to know after experiencing a car accident in Detroit. Remember, a good Detroit car accident lawyer should also be able to explain these rules to you quickly and effectively.
What Is the No-Fault Insurance System?
In Detroit, and throughout Michigan, all drivers must purchase auto insurance to operate a vehicle. Except in rare situations, this includes the purchase of no-fault insurance, or personal injury protection (PIP) benefits. These benefits kick in quickly after a crash. They pay for things like medical expenses, lost wages, and other related costs, regardless of who is at fault of the accident.
The fundamental principle of no-fault insurance is that each driver’s insurance company is responsible for covering their own expenses from a car collision. This is true even if your own vehicle is not involved in the crash. This principle aims to expedite the claims process, reduce litigation and ensure the prompt payment of compensation for individuals hurry in a Detroit car accident.
Even if you do not have auto insurance, in almost all situations a person injured in a Detroit car accident still make a claim for no-fault benefits. This includes passengers, and people injured on the job.
Benefits of No-Fault Insurance in Detroit
The no-fault insurance system offers many benefits to drivers, passengers, and accident victims in Detroit. First, it provides a way for swift access to medical treatment and rehabilitation services. Because the accident victim doesn’t have to wait for the insurance company of the at-fault driver to step up and take responsibility, which can take years, they can promptly seek necessary medical care and payment for their medial bills.
Second, no-fault insurance provides payment for many important things. These benefits are found under MCL 500.3107, but include:
- The payment of medical expenses, up to the medical coverage limit that was purchased.
- 85% of loss wages for up to 3 years from the date of the accident.
- Payment to friends and family for taking care of the accident victim.
- Reimbursement for medications, pharmacy, and out-of-pockets expenses.
These features help alleviate the burden of worrying about lost income or mounting medical bills from a hospital stay and doctors’ appointments after a Detroit car accident. In theory, this is also supposed to decrease the number of lawsuits necessary because the accident victims receive prompt payment of benefits without unreasonable delays. But in the end, that has not really happened.
Challenges of No-Fault Insurance in Detroit
In part, because of the large number of uninsured drivers in Detroit, as well as the number of claims, auto insurance in Detroit is very expensive. Especially when compared to other parts of the state.
In addition, car insurance carriers have become very aggressive in using tactics to delay and deny the payment of no-fault benefits. Instead of decreasing the number of lawsuits, this has created an avalanche of litigation in Wayne County. I will explain that in more detail below.
The vast changes in 2019 to the Michigan no-fault law also affected hospitals and medical providers. Before, they could charge the usual and customary rate for their services. This allowed for a higher reimbursement rate. It also increased the price of insurance. After the changes, medical providers must now follow a confusing fee schedule that fails to adequately pay doctors and hospitals. This has caused many providers to refuse to treat auto accident victims in Detroit and elsewhere, decreasing access to care.
Tactics Car Insurance Companies Use to Deny No-Fault Benefits
In Detroit, car insurance carriers have several tools at their disposal to delay and then deny the payment of expenses. Under the Michigan no-fault law, a person must prove their injuries and the need for treatment are related to the Detroit car accident. MCL 500.3105.
Independent Medical Evaluations – H3
The first tool is the independent medical examination, or IME. Under MCL 500.3151, the car insurance company can send a claimant to an “an independent medical examination” after the crash. At its core, this means Allstate Insurance, State Farm or any other carrier can pick a doctor to review your medical records, perform a quick examination, and then write a report. The insurance company can then use this report to fight medical treatments or outright terminate benefits.
These exams are paid by the insurance company. The doctor performing the exams makes a lot of money to do these reports for insurance companies. The conflict of interest here is abundantly clear. In addition, an injured person can be sent to multiple IMEs for different specialties. This makes the process even more frustrating and expensive.
Putting a Claim “Under Investigation”
Right after a claim is made, a car insurance company pay write a letter to the injured person stating the claim is “under investigation.” Basically, this means the car insurance company is not going to pay a thing until they get a statement from the injured person, obtain medical records, and get other information. This delays the payment of lost wages and medical bills. It often then forces the accident victim to turn to an experienced Detroit car accident lawyer to fight for the benefits they are supposed to get.
Asserting Fraud or Material Misrepresentation
Another tactic auto insurance companies use to get out of paying claims is to assert the claim is fraud. They will also assert there has been a material misrepresentation under the policy. This usually happens when the driver using the vehicle is not on the policy or different family members live in a home than what’s listed on the insurance application.
But do not let insurance companies get away with these harsh accusations. Hiring an aggressive Detroit car accident lawyer who knows how to fight back against insurance carriers who assert fraud is your best course of action.
Navigating No-Fault Insurance After a Car Accident
In the event of a car accident in Detroit, understanding the basics to navigate the no-fault insurance system is vital to obtaining your benefits and compensation. The following stems can also help individuals manage the aftermath of a collision:
- Seek Medical Attention: Even if you don’t think you’re injured, seeking prompt medical attention is important. Calling an ambulance, going to a local hospital, or even just seeing urgent care for further evaluation and treatment can prevent a minor injury from being a major injury.
- Call the Police: Make sure to report the accident by calling the police. Don’t leave until the police report is made. This helps document the incident and speeds up the claims process.
- Document Evidence: Gather evidence at the accident scene, such as photographs, video and witness information. This will strengthen the insurance claim and the increase the speed of claim processing.
- Call a Detroit Car Accident Lawyer: Before calling your insurance company, get information and know your rights. The insurance company will ask you a lot of questions. It is best to be prepared and understand the basics. A great Detroit car accident lawyer can help you and make sure you are doing everything correctly.
Understanding Your Auto Insurance Coverages
To navigate a no-fault claim in Detroit, it is important to understand what your insurance coverages. Get a copy of the declaration page. This is the page that lists all the insurance coverages that cover you or the car involved in the crash. The declaration page will state how much in PIP benefits are available. The PIP limits can vary depending on eligibility, but most fall into these categories:
- Unlimited PIP
- $500,000 in PIP
- $250,000 in PIP
- $50,000 in PIP
- No PIP, still eligible for lost wages and replacement services
The declaration page will also list property damage coverage, as well as optional coverages such as uninsured motorist (UM) or underinsured motorist (UIM) coverage.
Detroit Car Accident Lawyers who Understand the No-Fault System
While the Michigan no-fault system offers many benefits, including prompt medical coverage and quick payment of lost wages, it also presents challenges. Hiring a Detroit car accident law firm that has helped thousands of clients navigate the system and obtain benefits is vital.
Most car accident victims are already behind the eight-ball after a crash, with mounting medical bills and no income. Getting your benefits turned on as quickly as possible can make all the difference.
Let the Detroit car accident lawyers at the Lee Steinberg Law Firm fight for you. Give us a call at 1-800-LEE-FREE. The call is free, and we never charge a penny until we win your case.
