An overview of Personal Injury Protection Benefits in Michigan

Category: Consumer Services

Know Your Legal Rights or Lose Them

​The purpose of the No Fault Act is to guarantee payment of certain benefits to all accident victims regardless of fault in causing the accident.  It was originally intended to simplify the auto claims process but the opposite occurred mainly due to the broad language of the law leaving it up to legal interpretation and maneuvering thereby complicating the system.  
However, this fact works in favor of claimants if, and, when there is the unfortunate occurrence of a motor vehicle accident.

In Michigan, there is a growing trend of attorney tv advertisements bolstering personal injury claims resulting from motor vehicle accidents.  The reason is that few policy holders are aware of the compensable benefits they are entitled to when injured by a car.  Although we pay the enormous costs to insure vehicles, claims are rarely filed in fear of raising insurance costs.  But what policy holders usually don’t know is that in cases of injury the benefits can be just as significant, at least, here in Michigan.  Thus, it is of critical importance for accident victims to fully understand their legal rights regarding auto claims or they may lose them.

The ability to file personal injury claims for auto-related accidents stems from the statutory Section 3105 of the Michigan No Fault Act which is considered the pivotal or gateway section to No Fault PIP benefits.  While Section 3105(2) gives the No Fault system its name, Section 3105(1) sets forth the basic legal entitlement test for compensable PIP benefits.  The Section reads: “Under personal protection insurance an 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, subject to the provisions of this chapter.”

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So, as you can see the entitlement language of this section goes beyond bodily injury resulting from auto collisions.  It also deals with injuries “arising out of the ownership, operation, maintenance, or use of a motor vehicle.”  The language of Section 3105(1) extends entitlement benefits beyond the typical scenario of auto collisions to non-collision accidents such as injuries sustained during the process of vehicle maintenance, or, simply riding in a vehicle.

After examining the scope of PIP benefits the next issue is to review the eligibility requirements to access those benefits.  In order to do that we have to review the entitlement test and statutory exclusions and disqualifications as set forth in Section 3105(2).  There are five elements that qualifies an injured party to No Fault PIP benefits.

1. The accident must involve a motor vehicle (i.e. car, bus, motorcycle).
2. There must be a bodily injury resulting from the accident in order to file a claim.  Pre-existing conditions may qualify when exacerbated by injuries sustained in the accident.
3. The injury or injuries must be accidental and not deliberately caused by the claimant.
4. There must be significant causation between the injury and use of a motor vehicle.  The vehicle must be one of the causes of the injury (there may be other causes) and the connection between the injury and use of the vehicle must not be incidental.
5. The injury must be closely related to the transportational function of a motor vehicle.

Entitlement disqualifications fall into two (2) categories: (a) the parked vehicle exclusion, and (b) the statutory disqualification.  The parked car exclusions are outlined in Section 3106(1) and Section 3106(2).  It is important to know that neither section does not expressly state you are disqualified from entitlement benefits if accidental bodily injuries are sustained in a collision with a parked car but does require specific circumstances that make those benefits payable.  Also, when an accident occurs involving, both, a parked and moving vehicle at the same time, the moving vehicle takes precedence for eligibility to benefits and the parked car criteria are not applied.  An accident with a parked vehicle must fall into the following four (4) scenarios:

1. the car must be improperly parked, in such a way as to cause unreasonable risk of injury
2. the injury must occur as a result of direct physical contact with:

• permanently-mounted vehicle equipment while in use or being operated
• property being lifted on and lowered from the vehicle while loading or unloading
• an injury occurred while occupying, entering into, or, getting out of a parked vehicle
• an injury occurred while performing vehicle maintenance

The fifth parked car exclusion criteria as stated in Section 3106(2) specifies that benefits are not payable when an accident occurs with a parked car and an injury occurs during loading, unloading, performing mechanical duties, or getting in or out of a vehicle while in the course of employment.  The reason is that injuries sustained in the course of employment are generally covered under workers’ compensation laws.  Exceptions to this exclusion is when the injured person is an occupant of the vehicle or driving the vehicle in the course of employment.  In the case of either occupying, or, driving a vehicle in the course of employment, the employee would be entitled to both workers’ compensation and PIP benefits.

Statutory disqualifications are outlined in Section 3113 which states that an injured persons are not entitled to PIP benefits when operating: (1) a stolen vehicle or motorcycle; (2) an uninsured vehicle; (3) a vehicle registered and insured in another state outside of Michigan and the occupant is a foreign resident; and, (4) a vehicle or motorcycle as an unauthorized user.

Finally, PIP benefits can be payable to Michigan residents when an accident occurs out-of-state.  But the injured party must be covered under a Michigan No Fault policy as the insured, the spouse or resident relative of the insured, or the occupant of a Michigan insured vehicle.  Out-of-state residents may also be entitled to PIP benefits when occupying a Michigan insured vehicle, or as a pedestrian, bicyclist, or motorcyclist injured by a insured moving vehicle.  Furthermore, out-of-state citizens may draw benefits if insured by an insurance company authorized to do business in Michigan stipulated by a maximum $500,000 limitation in certain cases.  Out-of-state claimants should seek legal counsel to interpret the complicated scenario of non-resident entitlements.

If you have questions, please complete the Contact Form for more information.

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