Dingeman Dancer

The No-Fault Road Map

AuthorAshley L. Wilson

Northern Michigan transforms into a frozen tundra during the winter months. While many of us would rather stay inside and hibernate when winter storms strike, most of us are forced to face the treacherous conditions. In doing so, we put ourselves at risk. The good news is, Michigan’s No-Fault Act offers protection for injured drivers when those risks become a reality.     

Michigan’s No-Fault Act requires no-fault insurers to provide Personal-Protection-Insurance Benefits (PIP Benefits) irrespective of fault. Coverage is triggered upon a showing of accidental bodily-injury or aggravation of a pre-existing condition,[1] and a showing that the accidental bodily-injury suffered was related to the motor vehicle’s “transportation function.”[2] The benefits for an injured insured include allowable expenses, work loss, and replacement-service expenses.[3]

This article explains the benefits that are available when you are injured in a car accident and why it is important to know your rights under Michigan’s No-Fault Act.

Allowable Expenses

MCL 500.3107(1)(a) provides for the reimbursement of expenses that are reasonably necessary to an individual’s care, recovery, and rehabilitation.[4] While this provision is commonly interpreted as being exclusively limited to medical expenses, it is not. Michigan courts have recognized that “allowable expenses” also includes other products, services, and accommodations—including in-home health care provided by nurses, medical attendants, medical aides (or family members); vocational rehabilitation; home modifications; transportation costs (medical mileage); and expenses of a guardian or conservator.[5] Currently, these benefits are unlimited so long as they are related to the automobile accident.

Work Loss

MCL 500.3107(1)(b) affords limited reimbursement for income that an insured would have earned “but for” the accident. The work-loss benefit is capped at $5,392 per month and is available for three years from the date of the accident. However, an insured can only recover 85% of his or her gross wages unless the insured can show that his or her wages would have been reduced by a lesser amount.

Replacement Services

MCL 500.3107(1)(c) allows reimbursement for expenses incurred for household services that an insured would have performed “but for” the accident (i.e., replacement services). The benefit is capped at $20 per day and is available for up to three years from the date of the accident. Replacement services often include services such as doing the laundry, grocery shopping, doing yard work, cleaning the house, and cooking meals.

Implications of Tort Reform

While the Michigan No-Fault Act provides protection for injured individuals, those protections are consistently being challenged as part of Michigan’s No-Fault Reform. In 2013, the Michigan House or Representatives introduced House Bill 4612. Initially, House Bill 4612 sought to cap the allowable-expense benefit at $1 million, which provides unlimited lifetime benefits for those who are catastrophically injured in a car accident. Since 2013, House Bill 4612 has been changed in an attempt to limit or cap No-Fault benefits.

The most recent bill was proposed on April 15, 2015 by the Senate. Senate Bill 248 proposed to cut insurance premiums and implement various “cost control measures” to regulate the allowable-expense-benefit provision. These “cost control measures” could reduce the reimbursement that hospitals and other care providers receive for catastrophic injuries, which could be devastating to the health care industry. The bill would also limit attendant care benefits for those who are catastrophically injured and cared for at home.   

This trend demonstrates a strong probability that Michigan’s No-Fault law will be challenged again. Thus, it is important to understand your rights under Michigan’s No-Fault Act. It is also important to educate yourself regarding the recent push for No-Fault Reform, so that you can protect your interests and your rights. Car accidents are unpredictable. It is therefore important to know that the law affords protection to you if you are seriously injured. 

If you were injured in a car accident and would like more information regarding your rights to recovery, please contact the experienced personal injury attorneys at Dingeman & Dancer, PLC, (231) 929-0500, 100 Park St., Traverse City, MI 49684.

FOOTNOTES

  1. Mollitor v. Assoc. Truck Lines, 140 Mich. App. 431 (1985).
  2. See McKenzie v. Auto Club Ins. Ass’n., 458 Mich. 214 (1998); see also MCL § 500.3105 (1973) (“[A]n insurer is liable to pay benefits for accidental bodily injury arising out of the ownership, operation, maintenance or use of a motor vehicle as a motor vehicle . . . .”).
  3. See MCL 500.3107; see also MCL 500.3108.
  4. MCL 500.3107(1).
  5. See Morales v. State Farm Mut. Auto Ins. Co., 279 Mich. App. 720 (2008); Douglas v. Allstate Ins. Co., 492 Mich. 231 (2012); Kondratek v. Auto. Club Ins. Ass’n., 163 Mich. App. 634 (1987); Williams v. AAA Mich., 250 Mich. App. 249 (2002); Swantek v. Auto. Club of Mich. Ins. Grp., 118 Mich. App. 807 (1982); Heinz v. Auto Club Ins. Ass’n., 214 Mich. App. 195 (1995).