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Michigan First-Party Claim

first party claim

Michigan Car Accident No-Fault Lawyers

Michigan car accidents are usually divided into two categories. There are first-party claims and third-party claims. Third-party claims are standard negligence cases against an at-fault driver for causing a crash and injuries. They are made against another person (through their insurance carrier) and involve receiving compensation for pain and suffering. In some cases they can also include economic damages, like medical bills.

First-party claims are different. They only involve the car insurance company responsible for paying the benefits. They also only involve economic losses from a car, truck or motorcycle accident in Michigan.

What is a First-Party Claim?

A first-party claim is a claim with a car insurance company after a Michigan car accident. It is not a claim for vehicle damage. That is a called a collision claim. Rather it is a claim for personal injury protection (PIP) benefits, also known as no-fault benefits.

Almost every person injured in a car accident can get first-party benefits. Because Michigan is a no-fault state, even the individual who caused the crash is eligible for first-party benefits. 

The entities in a first-party claim are always the injured claimant and the auto insurance company responsible for paying the no-fault benefits. First-party claims are an integral part of Michigan car accident cases. Under Michigan law, the car insurance carrier is responsible for paying certain benefits resulting from injuries after a crash. These benefits are supposed to be promptly paid, typically within 30 days of receiving proof.

What Are First-Party Benefits or No-Fault Benefits?

First-party benefits are spelled out by the Michigan no-fault law, but they are also listed in the car insurance policies too. The benefits typically can be divided into three categories.

  • Allowable Expenses – This is the main category and typically involves the payment of medical bills resulting from the crash. The amount of medical expenses the insurance company must pay depends on the amount of PIP coverage purchased in the policy. This category includes all medical expenses, such as hospital bills, doctors’ bills, physical therapy, rehabilitation, surgery, transportation and prescriptions. In more serious car accidents, allowable expenses also include attendant care and even home modifications.
  • Lost Wages – The auto insurance company must pay 85% of gross wages for up to 3 years from the date of the motor vehicle accident. For example, if a person is earning $500 per week from their job but cannot work due to injuries and restrictions from the crash, then the proper insurance company must pay the injured person $425 for that week’s lost income.
  • Household Replacement Services – The auto insurance company must pay $20 per day for household replacement services. These are the household chores you could do before the accident but cannot do anymore because of your injuries. If a person, such as a family member or friend, steps in to complete these chores they are entitled to $20 per day for this work.

Most household chore claims are simple, but they do typically require the chore provider to keep detailed logs or calendars for the work they are doing. Many insurance companies also require a disability slip or doctor’s note saying the injured person requires this help. A good Michigan car accident lawyer can help you get these benefits.

Who Pays First Party No-Fault Benefits?

This is an important question. An injured person must file the first party claim against the correct auto insurance carrier. Failing to do so can lead to the loss of all no-fault benefits.

And the law is confusing. To make things even more complicated, the law changed drastically in 2019 and the order of who pays a claim completely changed. The following is the breakdown of which car insurance carrier is responsible for paying your no-fault claim. 

  1. Your own auto insurance carrier – if you have car insurance of your own, your own car insurance company is responsible for paying PIP benefits. This is true even if your vehicle or vehicles had nothing to do with the accident. If you are a named insured on the policy, then your own auto insurance must pay all first-party benefits. This has been the law for over 50 years and did not change in the 2019 reforms.
  • The auto insurance company of a resident relative – if you don’t have auto insurance but live with a relative who does have car insurance, then their car insurance must pay no-fault benefits. Again, it doesn’t matter if their car had nothing to do with the crash. That insurance carrier must step up and pay all first-party benefits.

The term “relative” is important. It is not defined by the Michigan no-fault law, but it typically refers to blood relatives such as parents, siblings, children and other close relatives. However, a person does not have to be blood related to the injured claimant to have their insurance carrier step up and pay no-fault benefits. It is important to contact an experienced Michigan no-fault attorney so you can get the correct information for your situation. 

  • The Michigan Assigned Claims Plan (MACP) – if an injured person does not have any auto insurance and does not live with a relative who has car insurance, then he or she MUST turn to the Michigan Assigned Claims Plan, or the MACP. The MACP is run by the Michigan Automobile Insurance Placement Facility. The Michigan Secretary of State manages the MAIPF, but in reality, the car insurance industry controls and manages the MACP.

To get benefits through the MACP, a claimant must fully complete the Application for Benefits. Usually, a police report or some proof of the accident must also be provided. The application is very detailed and asks for a lot of information. It is highly recommended an experienced Michigan car crash law firm assist you in making this claim.

Once an application is processed, the MACP will then assign a car insurance company to pay the claim. The servicing insurers are Nationwide Insurance, Farmers Insurance, Farm Bureau Insurance, Allstate Insurance, Auto Club (AAA Insurance) and Hanover Insurance Company (Citizens Insurance).

Under the law, the assigned insurance carrier is only obligated to pay up to $250,000 in no-fault benefits.

How Much Time Do You Have to File a First-Party Claim?

Under Michigan law, specifically, MCL 500.3145, a person must file a claim for no-fault benefits within one (1) year of the accident. The notice must be in writing and give the name and address of the claimant. The notice must also indicate the name of the person injured, as well as the time, place, and nature of the person’s injury.

This is rule is strict. If a person fails to give proper notice within one year to the correct insurance carrier, he or she forever loses her right to seek no-fault benefits. And remember these benefits, such as the payment of medical bills and lost wages are not the responsibility of the at-fault driver. So if you miss this deadline, you cannot then claim outstanding bills and lost wages against the driver who caused the crash.

This is why it is important to contact a Michigan car accident lawyer who specializes in no-fault cases and can process your first-party claim in a timely and efficient manner.

What is the One-Year Back Rule?

The one-year back rule means an auto insurance carrier must only pay benefits that are less than one year old. In other words, if an outstanding benefit (such as a medical bills or lost wages) is more than a year old, the insurance company does not have to pay that benefit.

The one-year back rule can be tolled or stopped by the filing of a lawsuit against the insurance company. This means once a lawsuit is filed in court against the car insurance carrier, the car insurance company is responsible for paying all benefits still not paid, even if they are over a year old. However, the insurance company must only pay the benefits that are a caused by the crash. 

In 2019, the Michigan legislature changed the rules for when the one-year back rule kicks in. For years, a lawsuit was required if a benefit had not been paid within the one-year anniversary of the crash. However, now the one-year back limitation does not kick in until the claim is formally denied in writing by the insurance company.

This means that even if a benefit is over a year old (like an outstanding hospital bill), and even if a lawsuit has not been filed, you can still get that benefit paid so long as your car insurance company has not formally denied your claim in writing.

Why Are Many First-Party Claims Denied by the Insurance Company?

Insurance companies love denying claims because they don’t want to pay out money. There is a reason they make billions of dollars in profit each year. They take premiums and specialize in findings ways to deny or stop paying an otherwise valid claim.

One of the most popular ways Michigan car insurance companies deny claims is by sending a person to an IME or independent medical examination. An IME is performed by a doctor selected by the insurance carrier. The doctor is paid for this examination. He or she will perform a brief examination and look at medical records provided to them by the insurance company. They will then author a report. The report can then be used by the carrier to deny the payment of further medical treatment, wages and other no-fault benefits.

Another way insurance companies deny first-party benefits is by claiming fraud on the part of the injured person. This tactic has become really popular. The insurance company will claim the injured person or claimant was not truthful when purchasing the insurance policy. Or they will say the injured person did something fraudulent during the pendency of the claim. These are serious allegations. A very good Michigan auto accident attorney can help fight these ridiculous allegations and get you the benefits you are entitled to under the law. 

If My First Party Claim is Denied, What Should I Do?

Call a winning Michigan first-party lawyer who knows how to beat the insurance industry. Once a claim is denied, payments stop. The insurance carrier will not change their decision no matter how much you argue or disagree with them.

That is why it is important to not sit on your rights. Contacting a Michigan no-fault benefits lawyer as quickly as possible after your claim is denied is the only way to get your benefits paid.  

Michigan First-Party Car Accident Lawyers

The legal experts at the Lee Steinberg Law Firm have been handling first-party claims for over 40 years. Our team of tough and aggressive Michigan car accident lawyers know what it takes to get you the benefits you paid for and deserve.

Call us at 1-800-LEE-FREE (1-800-533-3733) for a free consultation. We can answer your questions. Our office can also go after the insurance company for the no-fault benefits that have not been paid. We have collected hundreds of millions of PIP benefits for our clients. And we never charge anything until we win your case.