What is the Michigan No-Fault Law?
The Michigan No-Fault Law is a unique auto insurance system that governs how compensation for injuries and benefits from car accidents is handled. It was first enacted in 1973 and has undergone various changes over the years. Under the law, drivers purchase their own no-fault insurance, which pays certain benefits, such as medical bills and lost wages following a motor vehicle accident.
What Are Michigan No-Fault Benefits?
Under the Michigan no-fault law, several benefits are available to individuals injured in a car or truck accident. The most important is the payment of medical expenses, including hospital bills, doctor bills, surgery, physical therapy, and rehabilitation. The amount of medical expenses the auto insurer must pay depends upon the amount of personal injury protection (PIP) coverage under the policy. Many policies contain $250,000 in medical coverage or more.
Another significant benefit is the payment of lost wages. Under the law, so long as you are disabled from work because of car accident injuries, the auto insurance company must pay 85% of your gross wages. This benefit is available for up to three years from the accident date.
Other benefits include the payment of prescriptions, out-of-pocket costs, house replacement services, and reimbursement for the personal care that nurses, family members, or even friends provide to you because of car crash injuries.
What is the Purpose of No-Fault Insurance?
Michigan enacted the no-fault automobile law in 1973. The law’s purpose is to provide prompt payment for certain things for people injured in a car accident, such as medical bills and lost wages. At the time, people had to wait years until their entire case was settled before they received anything. The Michigan no-fault law sought to change that.
How Do I Start a No-Fault Medical Claim?
When a person is injured in a motor vehicle accident, that person can make a claim for no-fault benefits. To start a claim, the person involved in the crash, a family member, or their attorney should call the insurance company and ask to set up a claim.
Claims can also be made via an App if available, online, or by contacting your insurance agent. However, the easiest and most efficient way to make a claim is to pick up a cell phone and call. The person working for the insurance company will take down your information. They will ask how the crash happened. Tell them about the injuries and difficulties you have been having since the incident.
Also, make sure to obtain a claim number. This claim number should be given to every medical provider or doctor you see. Using the claim number, the doctor will send medical bills directly to the insurance company for payment.
What Evidence Do I Need To Make a Claim?
There is no specific evidence you need to make a no-fault PIP claim. However, the claimant is responsible for proving that the accident occurred and injuries were sustained. Some critical pieces of evidence include:
- Police Report – make sure the police report details who was involved in the crash and how it happened.
- Photographs – take photographs of your vehicle damage as well as the vehicle damage of any other vehicles involved in the crash.
- Video – if you can, take a video of the accident scene.
- Collision Estimate – a repair or collision estimate will prove to the insurance company that an accident happened and how much the vehicle damage cost.
How Does the Medical Claims Process Work Following a Michigan Car Accident?
After making a claim, the no-fault claims process usually involves completing an “Application for No-Fault Benefits” with your own auto insurance company. This must be done within one year of the car accident. The Application for Benefits asks basic information about the crash, how it happened, injuries from the incident, and medical treatment needed after the collision.
An insurance representative or “insurance adjuster” will be assigned to handle your medical claim. Don’t be surprised if you speak with multiple people through the claims office. The insurance adjuster will always ask for your claim number, so make that available when you call.
The insurance adjuster will also ask you to sign a medical authorization. This authorization allows them to receive your medical records. Under the law, the carrier is entitled to a signed authorization to review the medical record and pay for auto accident-related treatment.
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).
The benefit is considered overdue if the car insurance company fails to pay within this time frame. The insurer must pay a penalty interest of 12% on overdue payments.
The legal obligation to pay a claim exists only when the car insurer receives “reasonable proof of the fact and the amount of loss sustained.” What is reasonable proof? It is not defined under the law, but evidence such as medical records, medical bills, pay stubs, and other documentation are examples of reasonable proof.
Once the insurance carrier receives reasonable proof, they can either (1) pay the benefits, (2) deny payment, or (3) ask for additional information. If a denial is made, it must be done in writing, and the reason for the denial of benefits must be stated.
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, your 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.
Is a No-Fault Claim the Same As a Mini-tort Case?
No. No-fault benefits refer to the medical bills, lost wages, replacement services, and other items the insurance company must pay for injuries following a crash. The mini-tort claim refers only to the property damage to your vehicle.
Currently, a person can receive up to $3,000 from the at-fault driver for the property damage to their vehicle. If they have a lower deductible, then the mini-tort reimburses the deductible paid. Usually, the insurance carrier for the negligent driver or owner will pay the mini-tort money directly to the other party. However, if the person does not have mini-tort coverage, a lawsuit filed in small claims court is necessary.
How Do PIP Insurance and Health Insurance Work Together?
In some instances, PIP medical insurance will be the primary payment method for car accident bills. In other cases, health insurance is the primary method, while auto insurance pays for anything health insurance does not cover. Whether health insurance or PIP medical insurance is the primary method depends on different factors.
Government-sponsored health insurance plans like Medicare, Medicaid, Tricare, and VA are always secondary following an auto accident. If you have those plans, your auto insurance must pay first. In addition, if you purchased an uncoordinated no-fault policy, auto insurance would also be the primary option. Sometimes, no-fault insurance is coordinated, making health insurance primary.
Either way, you should not get stuck with the medical bills following an auto accident.
Can a Person Injured on a Motorcycle File a No-Fault Claim?
Yes, but a motor vehicle (like a car, truck, or bus) must be involved in causing the accident. Physical contact with the motor vehicle is not required. The priority rules are different for motorcycle riders and passengers. Instead of claiming benefits from their own insurance, PIP benefits are paid by the driver or owner of the motor vehicle involved in the incident. MCL 500.3114(5).
Talk to a Michigan No-Fault Injury Lawyer Today
The Lee Steinberg Law Firm is the expert in the Michigan No-Fault Law and has a team of Michigan car accident lawyers dedicated to helping you obtain the compensation you deserve. Our Michigan car accident attorneys have represented individuals injured in car, truck, and motorcycle accidents for over 50 years.
Call or contact our office today. You pay nothing unless we win your Michigan car accident case. Let us help you by calling 1-800-LEE-FREE (1-866-503-3043).