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Michigan’s No Fault Law (Continued)

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The insurance company has the power to investigate claims.
In addition to the specific language of your insurance contract, the No Fault Act provides for the following:

  • The submission to examination by a physician selected by your insurance company
  • The insurance company may request a sworn statement of earnings from your employer
  • The insurance company may request from your hospital, clinic or other medical institution a written report and medical records from both before and after your automobile accident

The insurance adjuster may contact family, friends and neighbors, doctors, therapists, clinics and employers to investigate your claims.  Some adjusters hire private investigators to follow you and “stake out” your home and neighborhood.

Attendant care

Attendant Care benefits are allowable expenses and the costs for these services are recoverable insurance benefits under the No Fault insurance system.  The phrase “attendant care” is not defined in the No Fault Act.  However, several Michigan and Federal Appellate decisions have provided us with an understanding of the meaning of attendant care under Michigan’s No Fault system.  In fact a definition by a prominent psychiatrist was quoted by the United States Sixth Circuit Court of Appeals as:

“Attendant care is the use of an assisted individual to help someone who has a disability resume a more normal life and continue to function in the community.  So it’s someone who is available to an injured person who can help them do the things they can’t do because of their injury and in terms of psychiatric issues or emotional issues who can provide supervision, reminders or cuing, limit setting, and advice and behavioral control and behavioral management for people who have impairments….The goal of attendant care is to allow someone to lead as normal a life as possible with whatever limitations their injury has caused.”

Attendant care services are not ordinary household tasks and should not be confused with replacement services. The Michigan Supreme Court noted that, “the services cannot simply be ‘ordinary household tasks,’ which are not for the injured person’s care.”  The Michigan Supreme Court also reaffirmed that “the statute does not require that these services be performed by ‘trained medical personnel’ and that medical services provided by a family member are compensable to the same extent as they would be if the services had been rendered by someone other than a family member.”  There is a longstanding principal in Michigan No Fault law that “family members are entitled to reasonable compensation for the services they provide at home to an injured person in need of care.”

Michigan Courts recognize that family members can and should be compensated for the care provided to the injured person in the home.  This compensation is the subject of considerable debate.  In one case the Court of Appeals stated that “comparison to rates charged by institutions provides a valid method for determining whether the amount of an expense was reasonable for placing a value on comparable services performed by family members.”  More recently, the Michigan Supreme Court has commented that the “compensation actually paid to caregivers who provide similar services is necessarily relevant” to this determination, but that the amount than an agency would charge for the services may not always be a part of the analysis.  The Supreme Court’s focus is on “what is a reasonable charge for an individual’s provision of services, not an agency’s.”  An argument can be made that the provision of services in the home by a loving family member may, in some circumstances, have a higher value than that of the revolving door of an agency and the agency’s charges for similar services.

Liss, Seder and Andrews begins with the recognized medical principal that when medically appropriate, the best place for an injured person to recover is in the home.

The history of Michigan’s No Fault Act

On January 5, 1972, Governor William G. Milliken assigned a high priority to the adoption of No Fault automobile insurance in Michigan.  Here is what Governor Milliken said about his hopes for a new system:

“The citizens of Michigan deserve a better system for compensating those injured in automobile accidents than exists today.  Part of the problem lies in the insurance mechanism, which in turn is based on a legal system which did not contemplate the use of the automobile by nearly every citizen.”

The same year, the Michigan Legislature adopted the No Fault system and the law went into effect in 1973.  Michigan was not alone; in the early 1970s, sixteen states passed forms of No Fault automobile insurance laws.

Chief Justice G. Mennen Williams, in the 1978 landmark Michigan Supreme Court case of Shavers v Kelly, characterized the goals of Michigan’s No Fault Automobile Insurance Act in the opening sentence of the Court’s opinion:

“The Michigan No-Fault Insurance Act, which became law on October 1, 1973, was offered as an innovative social and legal response to the long payment delays, inequitable payment structure, and high legal costs inherent in the tort (or ‘fault’) liability system.  The goal of the No-Fault insurance system was to provide victims of motor vehicle accidents assured, adequate, and prompt reparation for certain economic losses.”

The Supreme Court continued, noting how the No Fault system cured the “evils” of the prior tort system:

“The legislative response, the enactment of the No-Fault personal injury protection scheme, reasonably relates to the purpose of correcting these evils.  These provisions provide, inter alia, for payment without regard to fault within 30 days of claim for all reasonable medical and rehabilitation expenses, for wage loss and replacement services for a period of three years, for survivor’s loss of support and services for three years.  Such payments may substantially compensate all personal injury victims of motor vehicle accidents for economic loss, including the victims of motor vehicles accidents, who were, under the tort system, uncompensated or undercompensated for their economic losses.  Prompt payment provided for under the act may remedy the delays under the tort system.  By partially abolishing tort liability to those who suffer personal injuries as a result of motor vehicle accidents, the act may lessen the number of motor vehicle personal injury tort suits in the courts.  The prompt availability of compensation for economic losses may relieve the undereducated or those with lower income from the pressure – ‘legal’ or economic – to settle serious claims prematurely and for less than an equitable amount.”

The Michigan Catastrophic Claims Association.

Within a few years of the enactment of the No Fault law the legislature modified the law to establish the Michigan Catastrophic Claims Association (MCCA).  The MCCA pays for claims paid by an insurer that exceed a certain annually adjusted amount.  Today the amount is $500,000.00.  All insurers that sell auto insurance in Michigan must pay the MCCA an annual fee for each vehicle insured.  The fee is known as the MCCA assessment and is passed on in whole or in part to the policyholders.  The present fee is $175.00 per vehicle.

 

Today, Michigan’s automobile No Fault system provides a model for the country.