In 1973, the Michigan Legislature adopted the No-Fault Insurance Act (“Act”). The Act created a compulsory motor vehicle insurance program under which insureds may recover directly from their insurers, without regard to fault, for qualifying economic losses arising from motor vehicle incidents. An owner of an uninsured vehicle that is involved in an accident is prohibited from recovering No-Fault Benefits for injuries suffered in the accident. There are four (4) main categories of claims that are allowed. There are priorities of the proper party to sue. Generally, an injured party must provide the insurance company with Notice of the Claim within one (1) year of the accident. If the Insurance Company is not properly notified within one (1) year then benefits will be forfeited unless an exception applies. If an expense is incurred it is essential to make sure that expense is paid within one (1) year of it being incurred. If legal action is not brought within one (1) year of the expense being incurred then recovery of the expense will be forefeited unless an exception applies. Exceptions have been limited by Michigan Courts. The one (1) year Notice Rule has an exception for mentally incompetent persons and minors, but this rule does not apply to the One (1) year back rule regarding expensesPriorities
Generally a person involved in a motor vehicle accident claims benefits against based on the below priority. It should be noted that If a motorcycle is involved In an accident the motorcyclist would claim against the insurance company of the motor vehicle involved in the accident.
- (1) his or her own No-Fault Insurance Policy.
- (2)If the person does not have a policy then the claim would go against a Spouse’s Insurance policy, or if the Spouse is uninsured then against a relative’s policy that lives in the same household.
- If neither (1) or (2) applies then a passenger of a motor vehicle would be against the motor vehicle occupied.
- If neither (1) or (2) applies a person who is not a passenger (i.e a pedestrian) would claim against the vehicle involved in the accident.
- If a person is injured in an accident in an employer’s vehicle they would claim benefits against the employer’s no-fault insurance policy.
- If the person was not an owner of an insured vehicle involved in the accident and there is no other source to claim benefits against they can file a claim with Michigan Assigned Claims Plan .
There are four (4) major areas of Recovery under the No-Fault Benefits Act. They are as follows:Allowable Expenses for Care and Treatment
all reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person's care, recovery, or rehabilitation. Allowable expenses within personal protection insurance coverage shall not include charges for a hospital room in excess of a reasonable and customary charge for semiprivate accommodations except if the injured person requires special or intensive care, or for funeral and burial expenses in the amount set forth in the policy which shall not be less than $1,750.00 or more than $5,000.00.Wage Loss
Work loss consisting of 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 does not include any loss after the date on which the injured person dies. Because the benefits received from personal protection insurance for loss of income are not taxable income, the benefits payable for such loss of income shall be reduced 15% unless the claimant presents to the insurer in support of his or her claim reasonable proof of a lower value of the income tax advantage in his or her case, in which case the lower value shall apply. Beginning March 30, 1973, the benefits payable for work loss sustained in a single 30-day period and the income earned by an injured person for work during the same period together shall not exceed $1,000.00, which maximum shall apply pro rata to any lesser period of work loss. Beginning October 1, 1974, the maximum shall be adjusted annually to reflect changes in the cost of living under rules prescribed by the commissioner but any change in the maximum shall apply only to benefits arising out of accidents occurring subsequent to the date of change in the maximum.
Subject to the provisions of section 3107(1)(b), work loss for an injured person who is temporarily unemployed at the time of the accident or during the period of disability shall be based on earned income for the last month employed full time preceding the accident.Replacement Services
Expenses not exceeding $20.00 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, not for income but for the benefit of himself or herself or of his or her dependent.Survivor's Loss
Except as provided in subsection (2), personal protection insurance 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 at the time of the deceased's death 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 $20.00 per day, reasonably incurred by these dependents during their dependency and after the date on which the deceased died in obtaining ordinary and necessary services in lieu of those that the deceased would have performed for their benefit if the deceased had not suffered the injury causing death. Except as provided in section (2) the benefits payable for a survivors' loss in connection with the death of a person in a single 30-day period shall not exceed $1,000.00 for accidents occurring before October 1, 1978, and shall not exceed $1,475.00 for accidents occurring on or after October 1, 1978, and is not payable beyond the first three years after the date of the accident.
(2) The maximum payable shall be adjusted annually to reflect changes in the cost of living under rules prescribed by the commissioner. A change in the maximum shall apply only to benefits arising out of accidents occurring subsequent to the date of change in the maximum. The maximum shall apply to the aggregate benefits for all survivors payable under this section on account of the death of any one person.