About The Firm
Michigan’s No Fault Law
Michigan’s No Fault law for auto accidents was adopted in 1973 and it is highly complex. There have been countless cases in both the Michigan appellate courts and the Federal courts that interpret this law, resulting in significant changes to the law itself and how the courts apply it.
Insurance company executives, adjusters and their army of lawyers are armed with excuses to deny you of your rights and insurance benefits. Especially in the case of catastrophic brain injury or spinal cord injury.
Because we specialize in this area of law, we successfully protect the rights of catastrophically injured clients not just for a year or two, but for the decades that they will require assistance for daily living.
What All Accident Victims and Their Families Should Know
When the No Fault law was enacted, Michigan citizens gave up certain rights to damages in civil suits in exchange for certain types of insurance benefits that may be received – regardless of who was at fault for the auto accident. Basically, there are two potential kinds of claims:
- The No Fault Claim
The No Fault claim is typically against an injured person’s own insurance company (although there are exceptions).
Recovery of No Fault benefits is not dependent upon proving someone else was at fault for the accident. There are four types of claims collectively known as “Personal Protection Insurance” or “No Fault” or “First Party” claims:
- a. Allowable expenses for life.
These include “all reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person’s care, recovery or rehabilitation.” Allowable expenses are not limited just to doctor and hospital bills but also cover rehabilitation expenses, specialized vehicles and medical mileage, specialized housing, and attendant care, to list a few examples.
- b. Work loss benefits for 36 months.
This involves the loss of income from work an “injured person would have performed during the first 3 years after the date of the accident if he or she had not been injured.” Work loss benefits are capped, and change every year.
- c. Replacement service benefits for 36 months.
This benefit is for “expenses not exceeding $20 per day, reasonably incurred in obtaining ordinary and necessary services in lieu of those that, if he or she had not been injured, an injured person would have performed during the first 3 years after the date of the accident.”
- d. Survivor’s loss benefits for 36 months for accidents resulting in death.
Survivor’s loss benefits are payable for “a survivor’s loss which consists of a loss, after the date on which the deceased died, of contributions of tangible things of economic value, not including services, that dependents of the deceased…would have received for support during their dependency from the deceased if the deceased had not suffered the accidental bodily injury causing death and expenses, not exceeding $20 per day…”
- Tort Claim Against the Party at Fault
The tort claim is typically against the driver or owner of the motor vehicle at fault for the accident. The driver or owner of the motor vehicle at fault for causing the accident is immune from certain damages under the No Fault system. Typically, damages include “noneconomic loss” and “excess economic loss.” Non-economic loss claims require a showing that the injuries suffered by the accident victim arise to a “serious impairment of body function” or a “permanent serious disfigurement,” or death. A serious impairment of body function is defined in the law as “an objectively manifested impairment of an important body function that affects the person’s general ability to lead his or her normal life.”
Your Insurance Company’s Responsibilities and Your Responsibilities
Insurance company responsibilities when presented with a claim:
- Must promptly acknowledge and promptly communicate regarding a claim
- Must have in place reasonable standards for the prompt investigation of claims
- Must not refuse to pay a claim without conducting a reasonable investigation
- Must promptly explain the basis in the insurance policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement
- Must either affirm or deny coverage within a reasonable time after proof of loss statements have been provided
- Must not compel you to start a lawsuit to recover benefits by offering substantially less than the amount due
- Must not delay an investigation or payment by requiring you to submit a preliminary claim report and then require subsequent submission of formal proof of loss forms solely for the duplication of a verification
- Must investigate and pay the claim within 30 days of receipt of reasonable proof of the fact and the amount of loss sustained
- Must not give one reason for a denial and then after a lawsuit is filed change its reasons for the denial
Your responsibilities when filing a claim:
- Must find and read your insurance policy
- Must notify your insurance company promptly and in the time required by your policy. Different types of claims have different reporting requirements. You may be timely making one type of claim only to find out that you were late with another type of claim
- Must provide written notice to the proper insurance company within one year of the date of the accident when making a claim for Personal Injury Protection benefits
- Must typically file a lawsuit within one year of the claimed expense having been incurred, once written notice has been given. You typically cannot recover benefits for any expenses that were incurred more than one year before the lawsuit was filed
- Must provide the insurance company with reasonable proof of the fact and the amount of loss sustained
Most insurance policies also have clauses in the contract known as a “duty to cooperate.” You may be asked by your insurance company to assist in the investigation of the claim including providing statements and documents and to undergo medical examinations in a timely manner. If you do not “cooperate” with your insurance company this could be a basis for a denial of your claim.
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