Michigan No-Fault Law – Replacement Services - Lee Steinberg Law Firm

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Michigan No-Fault Law – Replacement Services

Another benefit available to auto accident victims following a collision is replacement services. Household replacement services are a standard part of every Michigan no-fault claim. Even if a person opts out of medical PIP coverage, they can still make a claim for replacement services.

What are Replacement Services? 

Household replacement services are things the injured person would have performed for himself/herself or their dependents had it not been for his/her injury in a car, truck, or motorcycle accident. They include but are not limited to preparing meals, grocery shopping, house cleaning, yard work, lawn mowing, and running errands.

How Much Does Replacement Services Pay?
A person may obtain up to $20.00 per day in household replacement services. This benefit is available for three years, beginning on the date of the accident.

Who Can Receive Replacement Services?

Family members and friends are entitled to compensation for the services they provide around the home on behalf of the Michigan car accident victim.

Are Household Chores Limited to $20 per Day?

Yes. Unfortunately, there is no cost-of-living adjustment or increase for replacement service benefits. The Michigan no-fault law was enacted in 1973, and we are still reimbursed the same amount for these chores more than 50 years later.

Which Car Insurance Company Pays Replacement Services? 

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:

  1. 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. 
  1. 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.
  1. 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.

How Long Does the Insurance Company Have to Pay Replacement Service Benefits?

Your car insurance company must pay replacement services within 30 days of receiving “reasonable proof” replacement services were performed. The best way to do this is by submitting calendars or an affidavit detailing the chores performed and the time frame. However, if you provide proof more than 90 days after the replacement services were 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. The insurer must pay a penalty interest of 12% on overdue payments.

Injured in a Car Accident and Need Help Getting Replacement Services Paid? Call the Lee Steinberg Law Firm to Get Results

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 replacement services. There is never a fee until we win your case.