
Michigan car accidents are usually divided into two categories: first-party claims and third-party claims. Third-party claims are standard negligence cases against an at-fault driver for causing crashes 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 that is responsible for paying the benefits. As explained below, they only encompass economic losses from a Michigan car, truck, or motorcycle accident. Under the Michigan No-Fault Law, you are legally entitled to receive Michigan no-fault benefits if you are injured in a car accident.
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 called a collision claim—but 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.
What Are Examples of First-Party Benefits?
First-party benefits are spelled out by the Michigan no-fault law, but they are also listed in every car insurance policy. Some of the more important benefits include:
Medical Expenses – The car insurance company must pay for all medical expenses related to the auto accident not covered by health insurance up to the PIP coverage limit. These expenses include doctors’ visits, physical therapy, rehabilitation, surgery, and other similar medical charges.
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. These are called wage loss benefits. For example, suppose a person earns $1,000 per week from their job but cannot work due to auto accident injuries. In that case, the auto insurance company must pay $850 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. Examples include laundry, vacuuming, dishes, taking out the garbage, mowing the lawn, shoveling snow, cleaning the home, and other household chores.
Attendant Care – Benefits also include the payment of nursing care following a crash. This nursing care or attendant care can be received either in-home or at a residential facility. Attendant care includes wound care, bathing, dressing, feeding, hygiene, and general supervision. Friends and/or family are allowed to provide nursing care services. The individuals doing the care are entitled to get paid hourly, just like an attending nurse.
Transportation Services – Insurance companies must pay for transportation services to and from medical appointments. This can include private rides, bus rides, Uber, or the use of private transportation companies.
Home Modifications – The insurance company is responsible for outfitting a home following a serious car accident injury. This includes installing a wheelchair ramp, lifts, bathroom facilities, and other accommodations.
Medical Mileage – This benefit includes medical mileage or gas money paid to travel to and from medical appointments.
Prescriptions – The car insurance company must reimburse for any prescription drugs and out-of-pocket costs.
Who Pays First Party No-Fault Benefits?
This is an important question. An injured person must file a first-party claim against the correct auto insurance carrier. Failing to do so can result in the loss of all no-fault benefits.
There is an order of priority to determine which insurance carrier is responsible. After the significant 2019 reforms, the order of priority changed drastically. The current order is the following:
- Your own auto insurance – 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, your auto insurance must pay all first-party benefits.
- The auto insurance company of a resident relative – this includes a spouse, sibling, child, parent, and possibly other relatives. 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 Michigan Assigned Claims Plan (MACP) – If an injured person does not have auto insurance and does not live with a relative who has car insurance, then they MUST turn to the Michigan Assigned Claims Plan, or the MACP. The MACP is run by the Michigan Automobile Insurance Placement Facility.
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. An experienced Michigan car crash law firm is highly recommended to assist you in making this claim.
Under Michigan law, the car insurance carrier is responsible for paying certain benefits for injuries sustained in a crash. These benefits are supposed to be promptly paid, typically within 30 days of receiving proof.
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 the name and address of the claimant must be given. The notice must also indicate the name of the person injured and the time, place, and nature of the injury.
This rule is strict. If a person fails to give proper notice within one year to the correct insurance carrier, he or she forever loses the right to seek no-fault benefits.
What is the One-Year Back Rule?
Michigan’s “one-year back rule” limits recovery of first-party No-Fault benefits to those that occurred one year from the date the benefit was incurred. This means the insurance company is not responsible for paying outstanding benefits, like medical bills or lost wages, that are over a year old. This rule was designed to encourage injured parties to timely pursue claims against insurers while evidence was fresh.
The one-year back rule can be tolled or stopped by filing a lawsuit against the insurance company. This means that once a lawsuit is filed in court against the car insurance carrier, the company is responsible for all unpaid benefits, even if they are over a year old.
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 start until the claim is formally denied in writing by the insurance company.
How Long Does the Insurance Company Have to Pay My Benefits?
Your car insurance company must pay your Michigan No-Fault benefits within 30 days of receiving “reasonable proof” of the benefit and the amount sustained. However, if you provide proof of outstanding lost wages or medical expenses more than 90 days after the treatment was provided, then the car insurer has an extra 60 days to pay the benefit(s). MCL 500.3142(3).
If the car insurance company fails to pay within this time frame, the benefit is considered overdue. The insurer must pay a penalty interest of 12% on overdue payments.
What Happens If the Insurance Company Denies My No-Fault Claim?
Insurance companies love denying claims because they don’t want to pay out money. This is the reason the industry typically makes billions in profits each year. If the insurance company denies your no-fault claim, the only recourse is to file a lawsuit to protect your rights. Our Michigan no-fault injury lawyers specialize in Michigan car accident cases and have hundreds of millions for our clients.
Why Can an Insurance Company Deny My No-Fault Claim?
Insurance companies are permitted to review an ongoing claim and pay benefits only related to the injuries from the car accident. In fact, an insurance carrier can make an injured person submit to a mental or physical examination by physicians to review if the benefit is accident related. MCL 500.3151.
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. They will perform a brief exam and look at medical records provided by the insurance company. They will then author a report. The carrier can then use the report to deny payment for further medical treatment, wages, and other no-fault benefits. MCL 500.3152.
Can The Insurance Company Deny My Claim Based on Fraud?
Another way insurance companies deny first-party benefits is by claiming fraud on the part of the injured person. This tactic has become popular among insurance carriers, especially Progressive, Cure Insurance, and LA Insurance. The insurance company will claim the injured person or claimant was not truthful when purchasing the insurance policy or did something fraudulent during the pendency of the claim. These are serious allegations. An excellent 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 car accident lawyer who can 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 50 years. Our team of tough and aggressive Michigan car accident lawyers knows what it takes to get you the benefits you paid for and deserve.
Call us at 1-800-LEE-FREE (1-866-696-9146) for a free consultation. We can answer your questions. Our office will go after the insurance company for your unpaid no-fault benefits. We have collected hundreds of millions of PIP benefits for our clients. And we never charge anything until we win your case.