UNDERSTANDING YOUR RIGHTS UNDER MICHIGAN’S NO-FAULT INSURANCE ACT
Michigan’s No-Fault Insurance Act went into effect October 1, 1973 and significantly affected how individuals who suffered injuries as a result of a motor vehicle accident were compensated. Although it has been forty years since the enactment of this landmark law, questions often arise about how it works and the benefits it provides to the injured parties.
The specific language of the law refers to an injury “arising out of the ownership, operation, maintenance or use of a motor vehicle.” This broad definition covers pedestrians who are hit by a car as they are walking along a street, as well as passengers in automobiles they do not own. Almost any injury that is in some way linked to a motor vehicle will fall under the scope of Michigan’s No-Fault Insurance Act. (It is interesting and important to note however, that in Michigan, a motorcycle is NOT considered a motor vehicle, so if the injuries you have suffered were caused by a motorcycle, the Michigan No-Fault Insurance Act does not apply.)
Once you have determined that your injuries arose out of the ownership, operation, maintenance or use of a motor vehicle, the major question is, who will compensate you for those injuries and how will you go about attaining that compensation? Before the No-Fault Insurance Act, the innocent party would have to sue the culpable party, hope that they had insurance, and, after an often-prolonged court battle, some settlement would be reached. This process was a long one, and often led to accident victims being undercompensated for their injuries. Under the No-Fault Insurance Act the situation is different; both the accident victim and the culpable party, if injured, may file a claim for benefits with their insurer, regardless of who caused the accident. For example, if Car A runs a red light and hits Car B, Car B’s driver will recover from his insurance company and car A’s driver will recover from her carrier.
These benefits, called PIP (personal injury protection) benefits, cover economic damages, all past and present reasonable and necessary medical expenses, all actual wage loss for a three year period after the accident, and $20 a day for “substitute services” (paying someone to mow the lawn or do other normal household tasks you are now unable to perform) for three years after the accident. No lawsuit is required, and your insurer is, in most cases, obligated to pay you these benefits so long as the benefits are reasonable, necessary and related to the injuries sustained in the accident. In exchange for this security, an accident victim, in many cases, gives up his or her right to sue the person responsible for the accident for non-economic damages.
Non-economic damages, like pain and suffering, loss of consortium (the inability to have normal marital relations), and loss of enjoyment of life compensation are not recoverable from your insurer under the No-Fault Insurance Act. Except in cases of death, permanent serious disfigurement, or serious impairment of a bodily function, an accident victim cannot sue the person who caused the accident for these damages either. Questions may arise as to whether your injury meets this standard, as well as to which insurer you should submit your claim for payment of PIP benefits. In that situation, it would probably be wise to consult an attorney well versed in the law’s provisions. The Michigan No-Fault Insurance Act has been very beneficial in simplifying the original tort model for accident recovery, but you will want to be sure you fully understand the application of the law in your situation and that you receive all the benefits to which you are entitled.