How To Protect Your Rights
Client Education Series
By Michael F. Kelly, Attorney At Law – 12/99
Table Of Contents
- The Michigan No-Fault Automobile Act & PIP Benefits
- How Do I Qualify For PIP Benefits?
- How Do I Claim PIP Benefits?
- What If I Am A Pedestrian Or On A Motorcycle?
- What Are Wage Or Salary Loss Benefits?
- What Are Survivor Loss Benefits?
- What Are Replacement Services?
- Funeral Expenses
- Medical Expenses
- What If I Have Hospitalization Insurance?
- Are Damages To My Vehicle Covered?
- Can I Still Sue The Other Driver?
- What If I Suffer A Closed-head Injury?
- What Damages Can I Collect If I Sue?
The Michigan No-Fault Automobile Act & PIP Benefits
The Michigan No-Fault Act became law on October 1, 1973. It was designed to provide a more efficient system of recovery and reparation for automobile accident victims. The benefits are called personal injury protection benefits (PIP). These benefits reimburse an accident victim for his or her economic losses caused by the accident. PIP benefits cover wage and salary losses, medical expenses (including all reasonably necessary services for an injured person’s care and rehabilitation and nursing services), funeral expenses, and replacement service expenses for ordinary household tasks (up to $20 per day). In some cases, family members may be paid for performing nursing and replacement services.
How Do I Qualify For PIP Benefits?
To qualify for PIP benefits, you must:
- Maintain an insurance policy on your vehicle. Failure to maintain an insurance policy is a misdemeanor offense and can cause you to be ineligible for no-fault benefits.
- Show that injury or death arose out of the ownership, operation, or maintenance of a motor vehicle.
- Notify the insurance carrier (which is responsible to pay your PIP benefits) of your injury within one (1) year of the date of your accident. Failure to do so will result in a loss of these benefits. Suit must also be started within one (1) year to collect unpaid PIP benefits. If later, you may go back only one (1) year from the time suit is commenced to collect. This is known as the “one (1) year back rule.” Collecting PIP benefits can be complicated. Contact this office for proper direction.
How Do I Claim PIP Benefits?
Regardless of whether you are a driver or passenger in a vehicle at the time of an accident, there is an order of priority which must be followed in order to claim PIP benefits. You must first claim benefits from your own insurance company. If you do not own an automobile, then you would claim your benefits from the insurer of another member of your household. For instance, if your spouse has a no-fault policy, but you do not, you would claim your PIP benefits under his or her policy.
If you are a passenger in a vehicle at the time of an accident, and neither you nor a member of your household has an automobile insurance policy, you would claim your no-fault PIP benefits from the insurer of the owner of the vehicle you were riding in when the accident occurred. If the owner does not have a no-fault policy, you would look to the insurer of the driver of the vehicle. Next, you would look to the owner and driver of the vehicle with which you collided.
If no one involved in the accident has a policy, then all parties would look to the Assigned Claims Facility for assistance. The Assigned Claims Facility is a group of insurance companies that provides limited no-fault PIP benefits to uninsured motorists, which is administered by the State of Michigan. This area of the law is complicated. If you have been involved in an automobile accident and there is question regarding coverage, consult this office immediately.
What If I Am A Pedestrian Or On A Motorcycle?
If you are a pedestrian and are struck by a vehicle, you can also claim no-fault benefits. The order in which you would seek to claim your benefits is the same as if you were a passenger in a vehicle.
If you are driving or riding on a motorcycle and are involved in an accident with a vehicle, you may receive no-fault PIP benefits from the insurer of the vehicle with which you collided.
What Are Wage Or Salary Loss Benefits?
The No-Fault Act requires your no-fault insurer to pay 85% of your salary or wage losses. Wage loss computations are based on your actual loss of earnings. This includes salary increases, overtime, cost of living adjustments, and other similar items which might have been earned during the period of disability. If you are temporarily unemployed at the time of the accident, you can still collect wage loss benefits based on earnings from your last job.
The No-Fault Act provides for payment of loss of wage benefits for three (3) years following the accident, and are subject to a monthly maximum amount. This figure is adjusted upward on October 1st every year. The maximum as of October 1, 2003, is $4,156. Check with this office for the current maximum monthly amount.
What Are Survivor Loss Benefits?
If a member of your family dies as a result of a vehicle accident, dependents of the deceased are entitled to collect the wages and fringe benefits the deceased would have earned, less the actual taxes he or she would have paid, subject to the current maximum at the time of death. These benefits last until termination of dependency or three (3) years from the date of the accident, whichever comes first. In the event of a death claim, consult this office to determine whether you are receiving the full benefit allowed by law.
What Are Replacement Services?
If a member of your family is injured or dies as a result of an automobile accident, family members can collect replacement services benefits up to $20 per day. These are defined as expenses reasonably incurred in obtaining ordinary and necessary services that were performed by the injured or deceased party before the accident. Examples of replacement services include housekeeping, child care, transportation, lawn care, snow removal, and maintenance on home and vehicle. This benefit is often disputed by insurance companies. If you are denied full payment of these benefits, consult this office.
Funeral Expenses
The No-Fault Act provides that actual burial expenses be paid subject to a $1,750 limit. This amount may also be reduced by the amount paid by Social Security as a death benefit.
Medical Expenses
Your no-fault insurer is required to pay all reasonable medical expenses for your care, recovery or rehabilitation. Examples of allowable medical expenses are hospital stays, out-patient treatment, prescriptions, diagnostic tests. braces, wheelchairs, beds, nursing services, home attendant care, medical services performed by family members, and reasonable transportation expenses incurred in obtaining medical treatment. Handicap accommodations to your home and automobile may be included within the scope of medical benefits.
These benefits are lifetime benefits and are not subject to the three (3) year limitation. Because of the tremendous exposure to the no-fault insurance carrier, insurance companies often try to limit the benefits wherever possible. If you feel you are not being paid your full benefits, consult this office immediately.
What If I Have Hospitalization Insurance?
No-fault insurers are not required to pay all your medical expenses if you are receiving medical payments from another source such as BlueCross/BlueShield or Medicare, and you have a coordinated benefits clause in your no-fault policy. In these instances. the no-fault insurer only pays what your hospitalization insurer does not.
Are Damages To My Vehicle Covered?
Unless you have collision coverage under your no-fault insurance policy, damages to your automobile are not covered.
However, the Mini-tort provision of the No-Fault Act does allow for you to sue the other driver for up to $500 in damages. You can sue under the Mini-tort provision only if you do not have collision coverage and can establish that the other driver was in whole or in part responsible for the accident. Suits under the Mini-tort provision can be brought in Small Claims Court without the need for an attorney.
Can I Still Sue The Other Driver?
Yes, under certain circumstances. You or your estate can still sue the other driver if you are not more than 50% at fault. If you have been found to be more than 50% at fault, you cannot recover damages.
The three circumstances under which you can still sue are:
- Death
- Serious impairment of bodily function
- Serious and permanent disfigurement
Proving death claims, serious impairment of bodily function. or permanent disfigurement is complicated and difficult. It requires skillful presentation of the facts. These claims are scrutinized very carefully by the defendant’s insurance carrier. If you have such a claim, contact this office immediately.
What If I Suffer A Closed-Head Injury?
No-Fault laws now include the recovery of damages for a “closed-head injury,” sometimes called Post-concussion Syndrome, In order to determine whether or not there has been a closed-head injury, a licensed M.D. or D.O. who regularly diagnoses or treats closed-head injuries must testify that there is serious neurological injury. Recovering damages for a closed-head injury is also complicated and difficult and requires skillful presentation of the facts. If you have a closed-head injury, contact this office for assistance.
What Damages Can I Collect If I Sue?
You can collect for all economic wages not compensated for by the no-fault plan. For example, your monthly wages or salary might exceed the maximum your no-fault insurer is required to pay. Or, it may cost more than $20 per day for replacement service expenses. These damages are recoverable against the other driver.
If you suffer an injury that has residual effects that last more than three years from the date of injury, or a catastrophic injury that lasts the rest of your life, you may recover all the wages you lose after the wage or salary loss benefits cease. You may also recover continued replacement service expenses and any other expenses related to your injury and not compensated by your no-fault carrier.
In the event of death, your heirs who share your estate may recover the lost wages you would have earned and provided for them during your lifetime. They may also recover for the loss of replacement services, and any other benefits you would have bestowed upon them.
In addition to recovering economic losses, you or your estate may recover non-economic damages which include pain and suffering, mental anguish, scarring, humiliation, and loss of enjoyment of life. Your spouse is entitled to recover for loss of companionship services and consortium, or sexual relations.
A highly skilled attorney can make all the difference in fully recovering damages under the Michigan No-Fault law. Contact this office to make sure you protect your legal rights.
