No Fault Insurance (BLL)

Who's Insurance Pays?

(1) Generally, if plaintiff is injured in an accident, look to the plaintiff's insurance carrier first. (This applies even if for pedestrian victims.) (2) If no policy, look to the policy of a member of the household (i.e., child looks to parent). (3) If no one in the household has a policy and the plaintiff is a passenger, look to insurer of the vehicle of which the plaintiff was riding. (4) If the plaintiff is driving a vehicle for hire (i.e., limos), look to the insurance of the owner of the car.

Motor Vehicle

A "motor vehicle" is one designed with more than two wheels, for operation on a highway. A "motor vehicle" is not a motorcycle or farm equipment.

Property Damage Coverage

The Act generally does not provide for tort liability on property damage, with the following exceptions: (1) A "mini-tort" provision which allows small claims suits up to $1,000 for damages not covered by insurance; (2) Liability for intentional harm on property; (3) Liability for failure to secure the mandated no-fault insurance coverage; and (4) Liability for damage to lawfully parked vehicles. The statute of limitations for property damage claims is one year.

Comparative Negligence

Under comparative negligence, the plaintiff's recover may be reduced or, if he is found more that 50% at fault, precluded. Additionally, failure to wear a seatbelt reduced recovered by up to 5%.

Non-Covered Persons vs. Non-Covered Persons (Third-Party Claims)

Uninsured motorists are precluded from receiving no-fault benefits when involved in an accident with another uninsured motorist because they would not be legally or contractually entitled to recover.

Covered Persons vs. Covered Persons (Third-Party Claims)

When both parties are covered, third-party claims may be brought only if the motor vehicle driver was negligent and the victim's injuries exceed the no-fault threshold.

First Party Claims

Claims filed by the owner/driver of a vehicle against his own insurance company under the contract.

No Recovery Available

Certain plaintiffs can never recover, including: (1) Car Thefts (2) Joy Riders (3) Unauthorized Users (including unauthorized family members and drivers without direct permission) (4) Owners of Uninsured Cars Note, a person using an unlawfully taken motor vehicle is covered under the Act if she reasonably believed that she was entitled to use it.

Minimum Amount of Coverage

An insurance policy under the No-Faul Act must, at minimum, provide liability coverage of $20,000 per person, $40,000 per accident, and $10,000 for property damage.

Full Benefits vs. Coordinated Benefits

An insured generally has the option of electing a policy with either full benefits, which provides for payment from that policy regardless of any payments received from other insurance coverage plans, or coordinated benefits policy, which will pay only that amount not covered by any other plan.

Third-Party Claims

Claims filed by a person injured in a automobile accident against the owner/driver of another vehicle.

Statute of Limitations (Third-Party Claims)

Generally, there is a three year statute of limitations on negligence actions, beginning when the injured party can allege a valid cause of action. Except: (1) The statute of limitations in an uninsured motorist claim can extent up to six years. (2) The statute of limitations in a no-fault subrogation action can extent up to six years. (3) Tolling of the statute may occur when the manifestation of a serious injury is delayed (but not when the severity of a known injury was simply miscalculated).

What is Recovered?

If a plaintiff is eligible to recover for economic losses (i.e., personal protection benefits). The following benefits may be available: (1) Medical Expenses (no cap, if genuine) (2) Incidental Expenses (maximum 3 year period) (3) Funeral Expenses (in the case of death) (4) Rehabilitation Expenses (5) Lost Wages (85% total wages, maximum 3 year period, $5,200/month maximum, taxed) (6) Household Services ($20/day, maximum 3 year period)

Michigan Insurance Requirements

In Michigan, drivers are required to have automobile insurance that includes: (1) Personal Injury Protection Coverage ("No Fault" or PIP), and (2) Basis Residual Liability Coverage.

Requirements for Tort Claim

In order to bring a tort claim, the plaintiff must have injuries that exceed the statutory "no-fault threshold." The plaintiff cannot get double recovery for items covered by no-fault insurance.

Parked Vehicles

Injuries arising out of the "ownership, operation, maintenance, or use" of parked vehicles are not compensable except where: (1) The vehicle was parked in such a way as to cause unreasonable risk of the injury that occurred; (2) The injury was a direct result of physical contact with equipment permanently mounted on the vehicle, while the equipment was being operated or used, unless during the course of employment; or (3) The injury was sustained by a person while occupying, entering into, or aligning from the vehicle, unless the injury occurred during the course of employment.

Chain of Permission Rule

Michigan Courts do not follow the chain of permission rules. A driver need permission directly from the owner; otherwise, the driver is an unauthorized user and will be unable to recover under the no-fault system.

What is Not Recovered?

Plaintiffs are not compensated for certain things under no fault, including: (1) Lost Wages Exceeding 85% (2) Non-Economic Losses (i.e., pain and suffering, disfigurement, humiliation, etc.) For these items, a plaintiff who meets the requirements may bring a tort claim.

Statute of Limitations (First Party Claims)

The No-Fault Act provides for a one-year limitations period on first party claims. However, if notice has been provided or benefit payments have been made within one year after the accident, a claim may be filed more than one year after the accident, as long as it is within one year after the most recent losses or expenses have been incurred. Nevertheless, the plaintiff may not recover any benefits for losses that were incurred more than one year after the date the suit commenced.

Covered Persons

The following persons are entitled to benefits from the insured-owner's policy: (1) The inured, his spouse, or a relative domiciled in the household; (2) The operators of the insured's automobile; (3) Passengers in the insured's automobile; (4) Non-occupants or pedestrians hit by the insured's automobile; (5) Operators or passengers of a motor vehicle used to transport passengers; and (6) An employee, his spouse, or a household relative injured while occupying a motor vehicle owned or registered by the employer.

Covered Persons vs. Non-Covered Persons (Third-Party Claims)

To bring a lawsuit against a negligence uninsured motorist, the injured insured must: (1) Show that the uninsured motorist was at fault; and (2) Meet the injury threshold.

Statutory "No-Fault Threshold"

To exceed the statutory threshold required for a plaintiff to bring a tort claim, injuries must involve: (1) Death, or (2) Permanent and serious disfigurement, or (3) Serious impairment of a bodily function. Impairment is considered "serious" if it effects the victim's ability to lead your normal life.

Requirements for No-Fault Recovery

To recover PIP benefits, a plaintiff must be injured as a result of "ownership, operation, maintenance or use" of a motor vehicle.