First Party Rights

MICHIGAN NO-FAULT ACT

MICHIGAN’S INSURANCE LAW FOR AUTOMOBILE ACCIDENTS

Automobile accidents can result in injury, death and disability. A person injured in a car/automobile accident in Michigan has legal rights which are defined by Michigan’s No-Fault Act. There are two types of no-fault claims, a “first-party” claim to claimants own insurance company and a "third-party" claim against the negligent driver.

FIRST PARTY CLAIMS:

First-Party benefits are payable to anyone who suffers an injury arising out of the ownership, operation, maintenance or use of a motor vehicle as a motor vehicle. Michigan auto accident first-party claims are made to a claimant's own no-fault insurer. The claimant's insurer, by thhe terms of the insurance contract and under the no-fault law, must pay no-fault benefits for expenses resulting from the automobile, truck, bus or motorcycle accident. First-party auto accident coverage inludes reimbursement for medical expenses, wage loss, replacement services, mileage, survivor's loss, funeral expenses, and attendant care.


Specific Michigan First-Party No-Fault Benefits that you should be entitled to from your own insurance company include:

Lifetime Payment Of Medical Bills
Michigan auto accident law provides that medical coverage is provided for life as long as the treatment received is related to the automobile accident. The allowable expense benefit is payable for life and is unlimited in amount. The only requirement is that the expense be "reasonable" in amount and that the service, product or accommodation for which the expense is charged is reasonably necessary for the injured person’s care, recovery or rehabilitation.

To qualify for medical expense reimbursement, a bill must be reasonable and the bill must actually be incurred. Payable medical expenses include "all reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person’s care, recovery or rehabilitation." Allowable medical expenses include hospital and physician charges, prescriptions, in-home nursing care, physical therapy and rehabilitation, vocational rehabilitation, medical mileage, artificial limbs, orthopedic appliances, etc. In order to avoid payment of legitimate medical expenses, insurance companies will often claim a procedure ordered by your physician to be unnecessary, or that the doctor or medical service provider billed too much.
Michigan insurance companies have two basic kinds of medical coverage in the event of an accident, un-coordinated polcies and coordinated policies. The terms of your policy control which benefits you will receive. An uncoordinated policy pays benefits regardless of the presence of other health insurance. A coordinated policy requires secondary health insurance to pay first, and provides that residual amounts are paid by the auto insurance.

It is common for a primary health insurance policy and an automobile insurance policy to contain contradictory language about who has the first obligation to pay medical bills. If there are any questions in this area, or bills are not being paid in a timely manner, an attorney should be promptly consulted. If a bill is not submitted within one year of the date it is incurred, the insurance company will likely argue that it is no longer obligated to pay.

Wage Loss Benefits

An accident victim is also entitled to recover no-fault PIP benefits for a loss of income the injured person "would have performed" had he or she not suffered injury in the accident. This work loss benefit is payable for three years and is limited to 85% of the victim’s gross income. Furthermore, the monthly benefit is subject to a monthly maximum which is adjusted each year.

Michigan No-Fault law allows for an injured individual to receive 85% of their salary if a doctor has disabled the injured party from working due to the injuries suffered in the automobile accident. This benefit cannot exceed a period of 3 years. There are reductions for taxes and a cap on the total amount which an insurance company need pay for wage loss.

Attendant Care Benefits

Attendant care benefits are sometimes referred to as Nursing Services. Severe Injuries often require the injured person to receive supervision and assistance for prolonged periods of time. It is not uncommon for a physician to state that a severe injury warrants around the clock supervision. There is no firm guideline that indicates how much an insurance company must pay for attendant care. Often, the quality of care and ability to choose the care provider are dependent upon an insurance carrier fulfilling its obligations under its contract of insurance. You should contact our office to secure premium attendant care benefits for yourself or a loved one.

Replacement Services

This benefit is called the "replacement service expense" benefit and is typically payable when an injured person can no longer perform domestic related tasks such as house cleaning, lawn work, cooking, babysitting, etc. In these situations, the injured person is allowed to be reimbursed up to $20 per day to hire other people, to perform these services. Under the Michigan system, an injured person is also entitled to receive a personal service allowance not to exceed $20 per day to reimburse the victim for expenses reasonably incurred in obtaining ordinary and necessary services in lieu of those that the victim would have performed for the benefit of the victim or the victim’s dependents had the victim not been injured. If you paid or promised to pay for household services, chores, errands, etc. that you would have accomplished on your own, then you may be entitled to reimbursement for these expenses. The person performing the services could be a family member, friend or stranger. A physician needs to document that you are unable to do these tasks on your own, and your insurance company may require documentation of who performed what services for you and when. Michigan law allows for only three years of replacement service benefits.



In cases of severe injury, benefits include an obligation to pay for renovations to a home or apartment, and in some cases, to even construct a new residence if such accommodations are now reasonably necessary. Room and board expenses may also be recovered if an accident victim would otherwise require institutionalization were it not for the fact that the victim is cared for at home. If special transportation is required such as handicapper equipped automobiles, specially equipped vans, or other accomodations, your first party carrier must pay for the cost of those vehicles. The allowable expense benefit also includes reimbursement for mileage to and from reasonably necessary medical care. In the cases of severely injured victims who require the appointment of a guardian or conservator, Michigan courts have held that such probate related expenses are also included as part of the allowable expense benefit.

Survivor Loss

In the case of death, the no-fault statute provides for payment of survivor’s loss benefits to the dependents for a three year period . Survivor’s loss benefits compensate a decedent’s dependent for a loss of contributions of tangible things of economic value that the dependents would have received for support during their dependency. Survivor’s loss benefits include the after tax income of the decedent and the value of fringe benefits which the decedent’s dependents have lost as a result of the death.

Mileage Reimbursement
Medical treatment and physical therapy often require an injured person to travel to and from appointments. Michigan No-Fault Law provides for the reimbursement for mileage traveled to and from doctor's appointments. You should keep track of all doctor vists so that you can obtain the correct reimbursement.

Michigan First-Party Order of Priority

Although your own insurance is first in line to pay in a Michigan automobile accident, there are occasions where an uninsured individual is an innocent passenger in a motor vehicle. The No-Fault Act sets forth the priority under which the proper insurance company is legally responsible.

The Insurance Company Wants Money Back

Sometimes, the PIP insurer will contact you saying that they overpaid some benefit and requesting reimbursement.  Whether or not you have to pay back money depends on the facts of your case.   Here are some guidelines for your review.

In MEEMIC v. Morris, 460 Mich 180 (1999), the Court stated without  discussion or citation that the statute of limitations in a claim for  reimbursement of no-fault benefits was 6 years.

In Wilson v Newman, 463 Mich 435, 441 (2000) the Michigan Supreme Court
summarized the principals regarding restitution of payments made by mistake:
"As a general rule, a payment made under a mistake of fact which induces the
belief that the other party is entitled to receive the payment when, in fact,
the sum is neither legally nor morally due to him, may be recovered, provided
the payment has not caused such a change in the position of the payee that it
would be unjust to require the refund." 

"If the Plaintiffs can demonstrate a change of position or detrimental
reliance as a consequence of having received the mistaken payment, they may be
entitled to retain all or part of the funds mistakenly paid by Allmerica.

Suing For Medical Bill Balances

McGill v. Automobile Ass'n, 207 Mich. App. 402  (1994)

The insureds were involved in claims where their insurance companies had paid a portion of their medical bills, but denied payment of the balance as being unreasonable charges. The insureds sought declaratory relief and an injunction ordering the insurance companies to pay the full amount of their medical bills, and to certify their suit as a class action. The insureds contended that the insurance companies' failure to pay their full medical bills could result in health care providers bringing legal action against them for the balance of their bills. The court disagreed, and affirmed the judgment of the trial court. The court held that a review of the record revealed no evidence that the insureds had suffered injury as a result of the insurance companies' partial payment of their medical bills, nor was any injury threatened. The court stated that where no case or actual controversy existed, the trial court lacked subject matter jurisdiction to enter a declaratory judgment, and properly granted the insurance companies' motions for summary disposition. Further, because the action was dismissed, the insureds' request for certification of the suit as a class action was properly denied.