What are Michigan No-Fault Benefits?
In Michigan, a person involved in a car or truck accident will almost always be entitled to no-fault PIP benefits for their injuries. These benefits are statutory, meaning they come from a written law. These benefits can include:
- The payment of doctor bills
- The payment of hospital bills
- The payment for rehabilitation and physical therapy
- The payment of 85% of lost wages for up to 3 years
- The payment of household replacement services for up to 3 years
- Nursing care and attendant care
- Reimbursement for prescription and co-pays
Which Car Insurance Company Pays These Benefits?
This is called the order-of-priority. No-fault benefits are paid by an auto insurance carrier like State Farm or Allstate. In Michigan, your own car insurance company is responsible for paying these benefits. This is the case even if your car had nothing to do with the crash or you caused the crash.
If you don’t have car insurance, then the car insurance company of a resident relative is obligated to pay first-party benefits. A resident relative is a family member who lives within a household. Examples include a spouse, sibling, parent, or even a grandparent.
If there is no car insurance in the household, then an injured person can make a claim for PIP benefits through the Michigan Assigned Claims Plan (MACP). The MACP is a non-profit entity run by the insurance industry. After completing an Application for Benefits, the MACP will assign an insurance company – such as Farm Bureau or Citizens Hanover – to pay the claim for no-fault benefits.
Who Is Disqualified from Collecting No-Fault Benefits?
But is everyone involved in a car crash entitled to Michigan no-fault benefits? Just because you are injured in an accident, does this mean you automatically qualify for the payment of medical bills and lost wages? As you might suspect, the answer is no.
Indeed, the Michigan No-Fault Law is complicated and involves a lot of rules and exceptions. There are situations where even innocent people involved in a car wreck cannot obtain compensation and benefits. It may not be fair, but it’s the law.
A list of exceptions is found at MCL 500.3113. To make things simple, the law is written here:
MCL 500.3113 – Person is not entitled to personal protection insurance benefits.
A person is not entitled to be paid personal protection insurance benefits for accidental bodily injury if at the time of the accident any of the following circumstances existed:
(a) The person was willingly operating or willingly using a motor vehicle or motorcycle that was taken unlawfully, and the person knew or should have known that the motor vehicle or motorcycle was taken unlawfully.
(b) The person was the owner or registrant of a motor vehicle or motorcycle involved in the accident with respect to which the security required by section 3101 or 3103 was not in effect.
(c) The person was not a resident of this state, unless the person owned a motor vehicle that was registered and insured in this state.
(d) The person was operating a motor vehicle or motorcycle as to which he or she was named as an excluded operator as allowed under section 3009(2).
(e) The person was the owner or operator of a motor vehicle for which coverage was excluded under a policy exclusion authorized under section 3017.
As you can see, there are times when a person injured in a car or truck crash is not entitled to no-fault benefits. I will explain these exceptions below.
1. Stolen Vehicles or Vehicles Taken Unlawfully
If a person steals a vehicle or takes a car for a “joyride”, and gets into a crash that person is not entitled to PIP benefits if they are involved in a car accident. This includes individuals injured in a motorcycle accident.
In Spectrum Health Hospital v. Farm Bureau, 492 Mich 503, 21 N.W2d 117 (2012), the Michigan Supreme Court held that any person who takes a vehicle contrary to the Michigan Penal Code, like the joyriding statutes, that person has taken the vehicle unlawfully for purposes of MCL 500.3113(a). This means a person injured in a car crash is not entitled to no-fault PIP benefits.
Michigan courts have expanded this exception over the years. That is why it is essential to contact a Michigan car accident lawyer if you have been involved in a car crash resulting in injuries.
2. The Owner of an Uninsured Car Involved in the Accident
This rule is very important. Under MCL 500.3113(b), a person involved in an accident with their own uninsured vehicle is not entitled to Michigan no-fault benefits. This includes not only title owners but registered owners as well.
For example, if you are driving or even a passenger in your own uninsured vehicle, you cannot make a claim for PIP benefits if you are injured in a crash. This is true even if another driver caused the accident.
Besides register and title owners, this law includes individuals considered constructive owners. Constructive owners are individuals who have control over a motor vehicle with the intent to use the car for more than 30 days. In Twichel v. MIC Gen Ins. Corp., 469 Mich 524; 676 N.W.2d 616 (2004), the plaintiff took possession of a car. He intended to keep the motor vehicle for longer than 30 days but was in a crash 5 days after taking possession of the car. The driver did not maintain insurance on the vehicle. The Michigan Supreme held that the driver was a constructive owner, even though he did not have possession of the car for 30 days. As a result, he could not make a claim for no-fault benefits.
This is a very important rule. If you own a motor vehicle – meaning a car or truck – and are involved in a car accident, you cannot obtain PIP benefits if the vehicle does not maintain auto insurance. Under the law, you are required to carry no-fault insurance on your car.
If you fail to do so, you face severe penalties. Not only may you have to pay a ticket, but you cannot turn to any auto insurance carrier for the payment of medical bills and lost wages.
Can an Uninsured Owner Get Pain and Suffering?
No. What makes this rule even worse is it prevents uninsured owners from collecting pain and suffering compensation. Under MCL 500.3135, an owner who is operating their own uninsured car and is injured in a wreck cannot make a claim for pain and suffering. This is true even if someone else was at-fault for causing the wreck, such as a drunk driver.
MCL 500.3113(b) affects thousands of drivers every year. It essentially takes away a car owner’s ability to collect anything for their injuries if they are injured in a car accident and do not have auto insurance.
3. Out-of-State Residents in General Cannot Obtain PIP Benefits
Under MCL 500.3113(c), a person who is not a resident of Michigan is not permitted to obtain no-fault benefits unless that person owns a car or truck registered in Michigan.
Essentially, this means that a person who is injured in Michigan, but a resident of another state, cannot claim no-fault benefits unless this person happens to own a car registered in Michigan. Because almost no out-of-state residents have a vehicle registered in Michigan, this eliminates just about all out-of-state residents from making a no-fault claim.
This is a drastic change in the law. Before the reforms made in the Michigan no-fault law in 2019, many out-of-state residents could still obtain PIP benefits for injuries that occurred in Michigan. But this is no longer an option for most people. Instead, they must rely on their own health insurance or the at-fault driver (in some situations) for the payment of medical bills following a Michigan car accident.
4. Individuals Excluded From the Insurance Policy Can’t Make a PIP Claim
This rule means any person excluded from the insurance policy cannot make a claim for no-fault benefits if they are injured while driving the excluded vehicle. This makes sense. The insurance company charges a premium based on risk. If a person is excluded from the policy, that risk is not part of the premium cost. The insurance company will not cover an individual it does not assess a risk for.
Excluded drivers are listed on the declaration page of the insurance policy. Make sure to never exclude a person who may operate the vehicle. If a person is going to use a car or truck, make sure they are not excluded. The penalties for allowing them to drive can be severe.
5. Uber or Lyft Drivers Can’t Make a PIP Claim Unless they Have Separate Insurance Coverage
MCL 500.3113(e) has to do with injuries that occur while a “transportation network company” driver is logged into a “transportation network company” digital network or while the driver is providing a prearranged ride. Transportation network companies include Uber and Lyft.
Under this law, the personal car insurance of an Uber or Lyft driver does not have to pay PIP benefits for injuries that occur when the driver is using the Uber or Lyft app. Under MCL 500.3017:
(1) An authorized insurer that issues an insurance policy insuring a personal vehicle may exclude all coverage afforded under the policy for any loss or injury that occurs while a transportation network company driver is logged on to a transportation network company digital network or while a transportation network company driver is providing a prearranged ride.
In effect, this means a person driving for Uber, Lyft, DoorDash, Grub Hub, Instacart, or similar companies must purchase auto insurance for the time they are working for these companies. Their own personal auto insurance won’t cover them while on the job.
For example, a person owns a Chevy Malibu and insures the car with Progressive. The owner also uses that vehicle for Uber. Progressive does not have to pay for any injuries or damages that may occur while the owner uses the Malibu to drive for Uber. Instead, the owner must purchase separate auto insurance for times he or she uses the vehicle for Uber. Ride-sharing companies like Uber and Lyft help drivers obtain this insurance.
Michigan Car Accident Lawyers You Can Trust
The Michigan car accident lawyers at the Lee Steinberg Law Firm, P.C. have been helping car accident victims for over 50 years. We make sure the correct auto insurance carrier is notified about the crash. We then ensure our injured clients get all the no-fault benefits and pain and suffering compensation they deserve.
Call our law office today. You pay nothing unless we win your Michigan car accident case. Let us help you. Call us at 1-800-LEE-FREE (1-800-533-3733) or complete a free case evaluation today.
