Auto accident victims and no fault insurance

Category: Consumer Services

Community Advocate

The State of Michigan requires all vehicle owners to purchase and maintain minimum basic coverage insurance known as No Fault Insurance.  This basic coverage allows you to operate and properly license a vehicle.  But, when it comes to car accidents there are things you should know about how your car repairs, medical care, and financial entitlements will be handled depending on the type of policy you purchase.

Because Michigan is one of twelve No Fault states in the country, certain criteria applies to your personal injury benefits and car repairs.  Currently, No Fault laws in Michigan, which are said to be the most generous allows for certain unlimited lifetime benefits regardless of fault or injury.  But, it does not pay for the repairs to your car or the other vehicle.  In fact, not all benefits are covered for a lifetime usually lifetime benefits only apply to your medical care.

So, here’s some basic tips you should know.  Basic coverage (No Fault) does provide for you medically, for the rest of your life without a cap on the cost of your care.  The only way that you can lose that benefit is if you, through your lawyer, negotiate or waive your features at the settlement of the claim.

If you experience wage or employment loss due to your injuries, No Fault insurance will pay 85% of your earned income up to a maximum benefit of $5541 per month for three (3) years.  If you are killed in an accident, your survivor’s will receive that benefit based on the earnings and fringe benefits you would have received.  This is known as the Work-loss Benefit.  Work loss benefits may also be paid if you are unemployed but in the process of looking for a new job.  Consult your attorney for more information.

You are also entitled to other benefits besides your medical care, medical equipment, home safety accommodations, or other rehabilitative expenses such as transportation and home care.  The formal name for home care is Household Replacement Services that is usually paid to the primary caregiver in the home.  The benefit allows $20/day for your care, assistance with daily living activities, and routine household maintenance.  Attendant Care is another entitlement typically provided by a professional medical company and the benefit paid is a negotiated hourly rate.  In some cases, your lawyer negotiates that rate and receives 30% of the benefit for Attendant Care over and above the legal fees assessed for handling the case. 

No Fault insurance provides for Residual Liability Insurance referring to bodily injury and property damage.  This means that No Fault will pay up to $1 million dollars if you damage someone's property with your vehicle (i.e a building or parked car).  But, the No Fault Law protects you from being personally sued except under special circumstances.  You can be sued in Michigan if you cause an accident where someone is seriously injured, permanently disfigured, or killed.  You can be sued if you are in an accident in another state or in-state if the other vehicle is registered to another state and the occupant is a non-resident.  You can also be sued up to $1,000 if you are at least 50% or more at fault and cause damage to another vehicle that is not covered by insurance.  You can normally purchase additional Limited Property Damage Liability Insurance called a “mini tort” to cover that $1000 expense for added protection in case of this circumstance.

In the case of residual liability where you are found legally responsible (50% or more at fault) for causing bodily injury or property damage No Fault insurance will pay certain benefits.  No Fault will pay up to $20,000 for claimants hurt or killed in an accident, up to $40,000 per  accident if several people are hurt or killed, and up to $10,000 for property damage in another state.

Finally, it is important to remember that No Fault insurance covers every member of the household even when you or a family member are passengers in another car or pedestrian  That means, if you are involved in an accident the law requires that claims must be filed against the policy registered to you or in your home.  Personal Injury Protection (PIP) benefits also extends entitlement benefits to individuals without No Fault coverage and are injured as a passenger or pedestrian by your car.  This is basic information about No Fault benefits.  Note that certain criteria and structures change annually.  Follow the link below for more information about No Fault insurance and how to purchase additional coverage.

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​CASE MANAGEMENT SERVICES
www.canmichigan.com/case-management-services.html

Links:
www.michigan.gov/documents/cis_ofis_ip202_25083_7.pdf