Michigan No-Fault Insurance Law

Michigan No-Fault Insurance Law

What does No-Fault mean in Michigan auto insurance claims?
Five No-Fault benefits that are available for accident victims in Michigan.

Hello, my name is Michael Baldwin at Baldwin Legal Services. I am a personal injury lawyer and specialize in insurance law in the state of Michigan. Today, I want to briefly explain what no-fault means in Michigan auto insurance claims and explain all five no-fault benefits that are available for accident victims in Michigan.

NO-FAULT INSURANCE is required by law in Michigan. Every owner of a car must buy certain basic coverage’s in order to get license plates. It is against the law to drive or let your car be driven without no-fault insurance. If you have an auto accident, no-fault insurance pays for your medical expenses, wage loss benefits, replacement services, and the damage you do to other people’s property. It does not matter who caused the accident, hence the term “no-fault.”

The basic concept of the Michigan automobile insurance system is to guarantee payment of certain economic losses to all victims of motor vehicle accidents regardless of who is at fault without having to bring the matter into the court system to receive compensation insurance benefits. Simply stated, an automobile accident victim turns to the insurance company responsible to pay for personal injury protection benefits, commonly referred to as PIP benefits. These PIP benefits are “economic loss” benefits.

The term “economic losses” has a specific meaning in the No-Fault Act, and amounts to a direct compensable loss that can be calculated with a sum certain, as opposed to a non-economic loss, which has no direct value determination. The distinction can be easily explained by example. An economic loss would be the total amount owed on a medical billing invoice. The total amount on the medical billing invoice is for a sum certain, as opposed to a non-economic benefit, which could be awarded to an automobile accident victim to compensate them for the pain and suffering they endured from an automobile accident.

There are five (5) economic benefits that are compensable under Michigan’s No-Fault Act. 1) Medical bills directly related to the automobile accident, 2) attendant care, 3) household services, 4) medical mileage, 5) wage loss reimbursement. Broken down, these five (5) benefits can easily be explained.

The first benefit, medical bills, compensates the accident victim for automobile related injuries for the remainder of their life. If you have health insurance, then you must go to that source of health insurance first. If you do not have primary healthcare insurance, then you collect from the automobile insurance company in priority to pay under the no-fault act to cover your medical bills. 

The second benefit is attendant care, which deals with someone assisting the accident victim with daily living needs. This is when you are so seriously hurt that somebody has to help you with the functions of daily living. For example, dressing, eating, going to the bathroom, or dispensing your medication. This is called attendant care and that is paid on an hourly basis. This is an extremely important coverage, because where people are seriously hurt, you are entitled to collect 24 hour attendant care for life if prescribed by a doctor.

The third benefit relates to household services, and deals with a third party assisting the injured victim with household chores. This benefit is also called replacement services and the benefit is $20 a day for people doing the work that you can no longer do because of their injury. Some examples would be housework, shoveling the snow, cutting the lawn, cooking and cleaning the house.

The forth benefit is called medical mileage and you are entitled to mileage reimbursement for transport services to and from medical appointments.

The fifth benefit compensates the automobile accident victim with wage loss reimbursement, up to 85% of your gross lost wages, tax-free every month you are disabled for up to three years.

What can you do if you have an insurance claim? You can contact me right away to discuss your insurance claim, and go over your insurance coverage benefit questions so that you understand what insurance coverage you are afforded after suffering an automobile related injury.