Michigan’s No-Fault Law: How It Impacts Your Claim

Unlike other states, there is a Michigan no fault law regarding car accidents. This means that your car insurance will cover your injury-related costs, whether or not you were at fault in causing the accident.

In 2020, a revamped no-fault insurance law went into effect that provides consumers more options for coverage. However, this new statute also complicates the process of seeking full compensation for many drivers, with a large increase in third-party claims now occurring.

Whenever the legislature and insurance companies get involved, a personal injury claim grows even more complex. Keep reading to learn how Michigan’s no-fault law can affect your claim.

Changes in the Michigan No Fault Law

For the last 50 years, the majority of drivers in Michigan only had the option to purchase unlimited no-fault coverage. The law has since changed, and Michigan drivers now have the choice of one of the following:

  • Unlimited personal injury protection (PIP) coverage
  • PIP coverage limited to $500,000
  • PIP coverage limited to $250,000
  • PIP coverage limited to $250,000 with certain medical exclusions (if you qualify)
  • PIP coverage limited to $50,000 (if you qualify)
  • Opting out of PIP coverage completely (if you qualify)

Most drivers should choose unlimited, or limits of $500,000 or $250,000 for better protection. The less coverage you have, the more the claims process for accident victims who endure serious injuries will affect their financial wellbeing. Having limited coverage will change the claim process for accident victims who endured serious injuries.

Insurance Company Advantage

The basic problem with the Michigan No Fault Law is that the legislature passed laws requiring every driver to obtain No-Fault insurance from profit-based private companies, like State Farm and Allstate. At the same time, there are no laws that ensure that insurance companies will pay the benefits to the auto accident victims that the legislature says they must pay.

For instance, you may be hurt in an accident and unable to work. However, that doesn’t mean that your insurance company is simply going to pay you. The legislature wanted that to happen; that is why they call it No-Fault, but it never did. As it turns out, insurance companies are very good at holding onto their money.

They’ll require you to attend insurance medical examinations (IMEs). This is where doctors, paid by the insurance industry, will see you for a few minutes and declare there is nothing wrong with you, or that you have healed from the auto accident.

After that, the insurance company merely stops paying you your benefits. They will then require you to either accept their decision, or hire an attorney to help you litigate against them for the benefits that the legislature guaranteed you.

Remember; an insurance company’s goal is to always make a profit, and the seriousness of a claimant injury is not always their top priority. That’s why it’s necessary to have an attorney that will fight for your rights.

How an Injury Can Qualify for A Negligence Lawsuit

In Michigan, only certain injuries will qualify a victim to sue a negligent driver for additional damages beyond their own PIP coverage.

Since the Michigan statute uses the term, “serious impairment of body function,” it can be difficult to navigate the issue as to whether or not your particular injury will qualify for a negligence lawsuit.

The insurance companies know this, and will attempt to contact auto accident victims before they retain an attorney. This is because they may say things that will hurt their chance for a lawsuit. We know from case law that broken bones typically represent a serious impairment of body function. However, soft tissues may or may not, depending on how these injuries affect a person’s ability to lead a normal life.

A knowledgeable auto accident attorney can help you understand the kind of injuries that will qualify you for pain and suffering damages.

Contact a Michigan No Fault Law Attorney for Help

No matter what type of no-fault coverage you have in Michigan, the claim process can be both challenging and stressful.

The legal team at Wigod & Falzon takes on complex car accident claims, whether a case involves first-party no-fault claims, fault-based third-party claims, or both. If you have any questions about your car accident claim, please do not hesitate to call (248) 356-3300 today or contact us online.



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