When to Hire No-Fault Lawyers in Michigan
A newly overhauled auto-insurance law that went into effect on July 1, 2021, means considerable changes for Michigan drivers used to the state’s generous no-fault auto policy. Michigan residents can now choose between different auto insurance options in an effort to lower Michigan’s exorbitant auto insurance premiums, but may also be left more vulnerable by the changes if they experience a car accident.
In the past, insurance coverage for an auto accident in Michigan could last a lifetime, Michiganders may now find their insurance coverage option comes up short in compensating them for personal injury, damages, and economic loss. If your insurance policy is not providing adequate compensation, consider hiring a personal injury lawyer at Cochran, Kroll, & Associates, P.C.
Michigan’s No-Fault Law
Michigan is one of 12 U.S. states (plus the District of Columbia and Puerto Rico) to have a no-fault law. This is a law that states that every car owner in Michigan must have insurance and be minimally covered.
It is illegal to drive or let your car be driven without no-fault insurance. It is a precondition for obtaining license plates.
The Michigan no-fault law means that if you are involved in a car accident, your own no-fault insurance pays for medical bills, benefits for loss of wages, replacement services, and damage done to property – no matter which driver is at fault for the accident.
The no-fault insurance that car owners must have should consist of: Personal Injury Protection (PIP), Property Protection (PPI), and Residual Liability Insurance, which covers bodily injury and bodily damage. These do not, however, cover repairs to vehicle damage.
What is Covered Under Michigan’s No-Fault Law?
The PIP coverage portion of an auto insurance policy entitles an injured person who was involved in a car accident to the following benefits:
- Medical care expenses (including physical therapy)
- Medical mileage (reimbursement for transportation costs to and from medical appointments)
- Wage losses
- Replacement services (paying for someone else to perform everyday household tasks, including chores, errands, and childcare)
- Attendant care (nursing care in the home)
- Home modifications
- Vehicle modifications (to accommodate accident-related physical limitations)
In the case of wrongful death, this coverage can also provide aid for funeral expenses.
Recent Changes to Michigan No-Fault Insurance
Of all the states that subscribe to no-fault laws, Michigan is unique in having PIP benefits. Since 1973, these benefits have provided unlimited medical coverage for a person’s lifetime if they have been injured in a car accident, including care, recovery, and rehabilitation.
However, changes to the law that took effect on July 1, 2021, give Michigan drivers a choice in the extent of their PIP coverage, letting them choose between six options. The reason for this change to the law is that next to the generous PIP benefits, the frequency of lawsuits and health care costs continued to rise, causing auto insurance costs to increase as well.
This meant that Michigan, as a no-fault state, became the 2nd most expensive state in the United States for auto insurance by 2017, according to the Insurance Information Institute (III), and the most expensive state in the U.S. by 2021, with an average of $4,003 per full auto insurance coverage – over three times the national average. This has also led to one in five, or 20%, of Michigan drivers choosing to be uninsured because of the unsustainably high auto insurance rates.
The high rates also gave Michigan the distinction of being one of the top states with the least auto insurance, despite being mandated by law. These are the factors behind the decision to change Michigan laws and allow drivers to choose the extent of coverage for no-fault claims that best suit their needs and budget.
The new no-fault law applies to car insurance policies issued or renewed after July 1, 2021.
Michigan’s No-Fault Insurance Today and Changes to No-Fault Benefits
The new no-fault auto insurance reform, already signed into law by Michigan Governor Gretchen Whitmer in May 2019, amounts to the greatest change in auto insurance law and the no-fault system in Michigan’s history.
With the six new PIP benefits to choose from and new coverage options for policies issued or renewed, insurance rates are set to be lower. However, those currently receiving specific benefits under the old PIP system, such as in-home attendant care following serious motor vehicle accidents, may have their care negatively affected.
The six new options are:
- Option 1: Unlimited Coverage (the same as the unlimited PIP coverage in the past, at a high auto insurance premium).
- Option 2: Up to $500,000 in coverage.
- Option 3: Up to $250,000 in coverage.
- Option 4: Up to $250,000 in coverage with some or all vehicle users excluded from PIP medical coverage. People may qualify for this option if they have qualified health insurance that doesn’t exclude auto injuries and have deductibles under $6,000.
- Option 5: $50,000 in coverage if a person is enrolled in Medicaid.
- Option 6: PIP Medical opt-out if a person has Medicare Parts A and B and meets other eligibility criteria.
The state minimum is also increased for bodily injury, uninsured motorists, and underinsured motorists.
Under Michigan’s new no-fault laws, Medicare coverage will pay after the limit of PIP coverage is surpassed. What it takes to surpass the PIP coverage depends on what level Michigan residents select when purchasing their insurance. This means that while the PIP medical coverage is still the primary payer in an auto accident up to the fault coverage limit, Medicare coverage pays after this limit is surpassed, leading to complications in recovering damages. A person with Medicare parts A, B, and C (Medicare Advantage) can choose to opt out of PIP coverage, in which case Medicare pays for everything.
Unfortunately, this also means that a person who had been seriously injured before the new law came into effect, who depends on health services such as home care, may lose these benefits when they would’ve previously lasted a lifetime. This is because the services themselves aren’t compensated under federal Medicare law. The companies that provide post-acute medical care will only be reimbursed 55% of what they were before the signing of the bill in 2019 under the new law. This, in turn, leads to those care provider companies withdrawing services because, for example, providing 24/7 care becomes financially unsustainable for them at these rates.
Essentially, lawmakers failed to look at the cost of care for post-acute patients in overhauling the law to benefit drivers, leading to the potential shortfalls in health insurance coverage. Concerns about this part of the new auto law led to protests outside the Michigan State Capitol in June 2021.
Who Pays When an Accident Occurs?
When a driver or passenger has suffered a personal injury or other damages in a motor vehicle accident in Michigan, a source of no-fault insurance will provide benefits according to “Order of Priority” rules outlined in No-Fault Statute MCL 500.3114.
These determine which auto insurance company has to pay according to the exact circumstances of the accident and what insurance arrangements a person has.
As a general rule, different auto insurance companies pay for different types of accidents, e.g., if they involve vehicles besides passenger cars, such as rental cars, motorcycles, or whether it involves pedestrians.
As a rule, if you have an auto insurance policy in your name in Michigan, your auto insurer pays your PIP benefits if an accident occurs, regardless of who caused it. If you don’t have a policy, the applicable insurance company is generally that of your spouse or a family member. If you don’t have any coverage at all, the Michigan Assigned Claims Plan will assign a no-fault insurance company to you when you apply for benefits.
Filing the First-Party Claim With Your Own Insurance Company
A first-party claim is a claim for medical treatment, medical bills, medical mileage, wage losses, attendant care, and replacement services. According to the no-fault statute, you must file a no-fault application with your auto insurance provider (who will also be able to provide you with the relevant forms). There is a one-year statute of limitations from the date of your accident.
Failing to file an application on time will result in you losing benefits related to the specific accident forever.
What is the Michigan Order of Priority?
According to the Michigan No-Fault Act, the no-fault insurance Order of Priority for drivers and passengers in car accidents seeking compensation, as outlined in No-Fault Statute MCL 500.3114, is:
- First Priority: the no-fault insurer of the injured occupant of the vehicle.
- Second Priority: the no-fault insurer of the spouse of the injured occupant of the vehicle.
- Third Priority: the no-fault insurer of the injured occupant of the vehicle’s closest relative who resides with the injured occupant.
- Fourth Priority: the Michigan Assigned Claims Plan.
These are the general rules. There are notable exceptions, however, which are as follows:
Vehicles in the Business of Transporting Passengers Order of Priority
The driver or passenger of a motor vehicle in the business of transporting passengers injured in a car crash in Michigan will generally be required to apply for no-fault benefits from the insurer of the motor vehicle. “Vehicles in the business of transporting passengers” includes public buses, school buses, taxi cabs, company vehicles, such as those operated by ride-sharing services like Uber, and cars or trucks whose owners have opted out of no-fault PIP medical benefits after the changes to the law, or to which exclusions apply.
Employer-Provided Vehicles Order of Priority
According to the no-fault statute, in the event of an accident involving vehicles provided by an employer, the employer’s insurer must provide no-fault benefits.
Pedestrian Accident Order of Priority
The no-fault order of priority for a pedestrian injured in a car accident is:
- First Priority: the pedestrian’s own no-fault auto insurance policy.
- Second Priority: the pedestrian spouse’s no-fault auto insurance policy.
- Third Priority: the pedestrian’s resident relative no-fault auto insurance policy.
- Fourth Priority: the Michigan Assigned Claims Plan, if the pedestrian has no access to an auto insurance policy.
Motorcycle Accident Order of Priority
The no-fault order of priority for motorcycles involved in an automobile accident in Michigan is:
- First Priority: the insurer of the owner or registrant of the motor vehicle in the accident.
- Second Priority: the insurer of the driver of the motor vehicle in the accident.
- Third Priority: the auto-insurer of the operator of the motorcycle.
- Fourth Priority: the auto-insurer of the owner or registrant of the motorcycle.
- Fifth Priority: the Michigan Assigned Claims Plan, if no motorcycle insurance is available to the injured motorcyclist.
Who is Eligible for No-Fault PIP Benefits?
Any person who suffers a personal injury due to a car accident in Michigan is eligible for no-fault PIP benefits as long as they are not the owner or driver of a car or truck without a no-fault insurance policy. There is, however, a five-part test to determine whether all the conditions are met for an injured party to receive the Benefits. The five questions that must be answered are:
- Is a motor vehicle involved in the accident?
- Did a bodily injury arise from the accident?
- Is the injury accidental?
- Is there a sufficient degree of causality between the ownership and use of a motor vehicle and an injury? (this does not have to amount to absolute causality: the liability threshold of causality to be proven is 50%).
- Did the car qualify as a motor vehicle at the time of the accident?
Who is Ineligible for No-Fault PIP Benefits?
There are several disqualifying actions for no-fault PIP benefits. These are if the accident occurred:
- While the victim was using a stolen vehicle.
- If the owner or registrant of the vehicle was not insured as required by the no-fault law.
- If the victim was not a Michigan resident driving a vehicle not registered in Michigan and not insured in Michigan.
- If the motor vehicle was excluded from insurance coverage because of an insurance company policy.
What Should I Do After a Car Accident in Michigan?
The first thing you should do after an accident is to get your bearings. In the seconds after the accident, you should steady yourself first and then check for injuries. Assuming you can move and you’re in a condition to do so, call the authorities immediately.
Then, collect as much information as possible: ask the other driver for their contact information, insurance company, and insurance policy number. If there were witnesses to the accident, ask for their contact details as well. Take photos of the crash scene, and seek medical care.
As soon as you can, you should contact an accident attorney at Cochran, Kroll & Associates, P.C., even before filing the insurance claim. At your free consultation, our attorneys can give you legal advice about how to proceed based on your account of the accident.
Depending on the nature of the accident, you may have another option in addition to seeking compensation through your no-fault insurance. Injured accident victims may be able to file a personal injury lawsuit to ensure complete and fair compensation for injuries, non-economic damages, and loss of income.
How Long Do I Have After a Michigan Accident to File a Lawsuit?
If you think you may be entitled to more money than your PIP insurance will cover, you might consider filing a personal injury lawsuit. The statute of limitations for filing in Michigan is three years from the date the accident occurred.
While your PIP insurance covers you, the recent changes to the auto-insurance law mean that you may only be covered up to a certain amount, depending on the option you have chosen.
You may also have non-medical considerations that your PIP insurance option doesn’t address, such as pain and suffering or loss of quality of life. In such an event, filing a personal injury suit, also known as a third party claim in Michigan, may be your only option to collect the damages you need to recoup.
The car accident may also have led to the tragic death of a spouse or family member. In this event, you may decide to file a wrongful death lawsuit against the negligent driver, which can also be applied to out-of-state motorists and uninsured drivers. The statute of limitations for a wrongful death lawsuit is also three years in Michigan.
Personal injury attorneys at Cochran, Kroll & Associates, P.C. have a strong track record and extensive experience with securing settlements for individuals and families in Michigan involved in accidents with life-altering consequences. Where no-fault PIP may not cover the true extent of the damages for car accident victims, we can help you fight for what you deserve.
Who Pays the Damages if I’m Injured?
Who pays depends on the circumstances of the accident, what kind of PIP auto insurance option you have, the order of priority, and whose fault the accident was.
The at-fault driver’s auto insurance company pays in the car accident lawsuit. However, where no-fault PIP auto insurance doesn’t cover the extent of the damages, and you’re forced to file a personal injury, or wrongful death lawsuit, the economic damages sought in the legal process may exceed the at-fault driver’s liability insurance coverage. When this happens, the defendant may be ordered to pay if proven negligent.
If you’re in a car accident and the at-fault driver has little or no insurance coverage, they can still be made to pay out of pocket. However, your ability to recover compensation for excess medical expenses, wage loss, or other economic damages may be limited by the driver’s ability to pay and their lack of personal assets.
How Much is Your Michigan Auto Accident Case Worth?
Each case is unique, with its own set of facts determining the outcome. If you decide to pursue a personal injury lawsuit, however, an experienced lawyer could settle your case for three to four times as much in fault claims as the amount you would expect without representation, according to research from the Insurance Research Council (IRC).
What Sets Cochran, Kroll & Associates, P.C. Apart
At Cochran, Kroll & Associates, P.C., we strive to secure fair financial compensation for victims of motor vehicle accidents based on the damages they have suffered, including non-economic factors such as pain and suffering, in addition to the financial value of medical costs and lost wages. This is because we know how important it is to ease the burden on accident victims so they can focus on the arduous process of rebuilding their lives following a car accident.
If you live in Michigan, were involved in a car accident resulting from another party’s negligence, and you think your PIP auto-insurance coverage is insufficient to cover the damages, contact the law firm of Cochran, Kroll & Associates P.C. at 1-866- MICH LAW (1-866-642-4529) for a free consultation. Our experienced attorneys can give you sound legal advice based on the circumstances of your case so you can determine whether you want to move forward with a lawsuit.
If you decide to use our services, you can expect honesty and integrity. We have a track record of recovering millions of dollars in personal injury and wrongful death suits. In addition, you can expect prompt communication, attentiveness to your needs, sensitivity to your emotions, and total transparency about your case and the strategy we employ. If you decide to proceed, we will fight on your behalf against the insurance companies who want to deny you and your family the personal injury compensation you deserve.
No Fees Until You Win
Because our firm operates on a contingency basis, we get paid only if we win your case. This means that there is no risk to you and zero upfront costs. Lawyer fees in Michigan are typically a third of the total settlement after it has been awarded. You can schedule your free consultation today using our contact form or give us a call to discuss the merits of your case.
What is different about the new no-fault law in Michigan?
You are still required to have no-fault automobile insurance in Michigan. However, the new law means that you can choose between six different Personal Injury Protection (PIP) options according to your needs and budget. The insurance pays for injuries to people, damages to your car, properly parked vehicles, and other people’s property. It does not pay for other damage to cars. Have a look at the six medical coverage options and talk to an insurance agent to work out which one best meets your needs.
Can you sue a driver in Michigan after an accident?
If you were injured in a car accident in Michigan, you can bring a lawsuit for compensation for pain and suffering, just like in any other state. In Michigan, however, the injured driver must be able to prove that they have suffered impairment of bodily function due to the other driver’s negligence.
Disclaimer : The information provided is general and not for legal advice. The blogs are not intended to provide legal counsel and no attorney-client relationship is created nor intended.