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By. Michael B. Rizik Jr. Attorney at Law
Office: 810-953-6000
Cell: 810-610-2673


The Michigan legislature passed the No-fault Automobile Insurance Act, MCL 500.3101 et seq., in 1973, altering how motor vehicle (i.e., automobile and truck) personal injury and wrongful death accident claims and lawsuits will be resolved. Since then the law has undergone several legislative and judicial changes, and the purpose of this web blog is to explain briefly the law.

For every automobile accident occurring in Michigan or involving a Michigan resident out-of-state, there are three potential claims:

  1. Personal Protection Insurance (“PIP”) claim or lawsuit for PIP/first party/no-fault benefits covering economic losses;
  2. A negligence claim or lawsuit against the party at fault for non-economic losses. In this article this includes underinsured (“UIM”) and uninsured (“UM”) motorist claims; and
  3. A claim to recover for collision damage to your vehicle.

Your browser may not support display of this image. Michigan’s law arguably makes it easier for non-attorneys to collect certain benefits. However, the method of obtaining compensation and the strict time limits for bringing suit are complicated, and usually require an attorney's assistance.

PIP Benefits Available

If you sustain any accidental bodily injury in a motor vehicle accident, you may recover the following benefits (known as PIP/first party/no-fault benefits) from an auto insurance company, usually your own:

  1. Reasonable medical expenses for life, including medical mileage;
  2. Wage losses for up to three years;
  3. Replacement services expenses for up to three years; and
  4. In death cases, survivor benefits for up to three years, and a one-time death benefit.

These are real, financial losses, distinguished from noneconomic damage such as pain and suffering, and mental and emption distress (with which we will deal separately below).

  1. Medical Expenses. You may claim, “all reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person's care, recovery or rehabilitation." Your automobile insurance company must pay these benefits for life, in an unlimited amount so long as they are "reasonable and necessary" and the medical charges are “usual and customary.”

Medical expenses include bills for doctor and hospital services, surgery, medicine, orthopedic devices, traumatic brain and spinal injury rehabilitation, physical therapy, and medically necessary equipment. Medical expenses also consist of private duty nursing services, unskilled nursing services (sometimes including those which family members perform), transportation costs for medical services, and certain expenses for handicap accessible vehicles, home modifications, medically necessary foods, rent, and vocational rehabilitation. The law allows payment of certain fees and expenses for a guardian and conservator.

If you or someone else drives you to and from a doctor, surgeon, hospital, therapy, and pharmacy for tests, prescriptions, and care and treatment of accident-related injuries, you are also entitled to claim payment for "medical mileage". There is no exact amount payable per mile that varies with each insurance company.

The PIP insurer may be required to purchase a modified vehicle for the injured insured. However, since 2013, this has been limited. The insurance company is no longer responsible for paying for the vehicle’s “base cost,” because the vehicle is an ordinary transportation expense unnecessary for the insured’s care, recovery or rehabilitation. The insurer may be responsible, however, to purchase a van, for instance, if you can show it is cheaper than public or other transportation. Likewise, the insurer may be responsible for modifications to a van to accommodate the insured’s disability. Arguably, the insurer would be responsible for paying insurance for and maintenance on the van’s modifications as well.

  1. Wage Losses. You may recover lost employment income from PIP insurance carrier for up to three years from the date of the accident. You will receive 85% of your gross wage (the other 15% is considered money you would pay in taxes), unless your tax rate is lower. This is available to you if you were employed - or even temporarily unemployed - at the time of the accident.

In addition to the common understanding of wages for purposes of computing the loss, salary increases, overtime, shift premiums and COLA may be included in the computation. Promotions and raises depend on employee performance and other underlying factors.

Generally, fringe benefits are not included as lost income. However, in some instances they may be. If you use sick and vacation time, or if profit sharing is part of your regular wages, then the PIP auto insurance company may have to reimburse these to you as lost wages, because they are benefits of your employment lost as a consequence of the accident. However, wage losses do not include investment income.

Work loss benefits include lost profits if you’re self-employed. However, lost earning capacity is not part of work loss benefits.

Work loss benefits end with the insured claimant’s death. However, as explained below, the surviving family members may claim “survivor’s loss benefits” which factor in actual wages losses, among other things.

Monthly wage loss payments are limited according to the statute to the amount available on the date of the accident with no upward adjustment. According to a 2013 amendment to the law: “Beginning October 1, 2013, the maximum shall be adjusted [upward from $5,189.00 monthly] annually to reflect changes in the cost of living under rules prescribed by the commissioner but any change in the maximum shall apply only to benefits arising out of accidents occurring subsequent to …[October 1, 2013].” If your monthly wages exceeds the limit, you may turn to the at-fault driver for the surplus amount, as this article explains below.

Your tax returns, IRS Form W-2, IRS Form 1009 and other wage and income documents are crucial to proving your wages losses.

  1. Replacement Service Expenses vs Attendant Care. You may recover for up to the first three years after an accident as much as $20.00 per day for expenses "reasonably incurred in obtaining ordinary and necessary services in lieu of those that, if he had not been injured, an injured person would have performed . . . " For example, if you cannot perform household duties such as mowing the lawn, laundry, housecleaning, etc., replacement service benefits are available.

Anyone, including a family member, may provide replacement services and be compensated, so long as this person did not provide them before the accident. Also, your oral promise to pay the person rendering replacement services is usually enough. Sometimes, in rare cases, the agreement may be implied by the claimant’s actions. Actual payment is not always necessary for making a claim. If you do not use the maximum amount available each day, you lose the difference, because replacement services benefits may not be stockpiled.

A benefit similar to replacement services is "attendant care" services. These are not limited by the $20.00 per day maximum, and are more like skilled or unskilled nursing services limited only by what is "reasonable and necessary." (See the discussion on "Medical Expenses" above).

  1. Survivor's Loss and Death Benefits. If an insured is killed in a motor vehicle crash, his or her dependents may recover survivor benefits "which consist of a loss, after the date on which the deceased died, of contributions of tangible things of economic value, not including services that dependents of the deceased at the time of his death would have received for support during their dependency from the deceased if he had not suffered the accidental bodily injury causing death . . . "

Survivor benefits are lost financial support for dependents, including the deceased's social security, pension, worker compensation benefits, medical insurance premiums and other benefits of employment. Survivor’s loss benefits include $20.00 per in day replacement services. (See the discussion on Replacement Service Expenses vs. Attendant Care above). The total recoverable amount is subject to the same monthly limitation as wage loss benefits. (See the discussion on Wage Losses above). These benefits may be reduced by payments the survivor receives, such as worker’s compensation and social security benefits. As with wage loss benefits, dependents may not receive survivor’s loss benefits for more than three years.

Based on the above the formula for calculating survivor’s loss benefits is complicated, but may be summarized as follows:

  1. Add the survivor’s economic loss (i.e., the deceased’s salary, taxes and benefits of employment) to the replacement services in a 30-day period.
  2. If the sum in #1 is greater than the monthly statutory maximum, then the amount payable is the monthly statutory maximum amount.
  3. If the sum in #1 is less the monthly statutory maximum, then the amount payable is the sum in #1.
  4. If the economic loss in #1 is greater than the setoffs, the PIP carrier’s liability is the amount payable minus the setoffs.
  5. If the economic loss in #1 is less than the setoffs, the PIP carrier’s liability is the amount payable minus the economic loss.

In the event of death, the decedent’s estate may claim a minimum of $1,750.00 for use in paying funeral and burial expenses. You may purchase additional coverage in $500.00 increments at insurance renewal time.

Coordination of PIP Benefits

You may voluntarily purchase PIP benefits in one of two forms: coordinated and uncoordinated. With a coordinated benefits policy your no-fault carrier is secondarily liable while another insurance carrier is primarily liable for PIP benefits. As a general rule, if you have traditional health insurance, your no-fault carrier is liable for the accident-related medical bills that health care insurance has not paid. For work loss benefits, however, the PIP carrier’s coordinated liability is calculated by subtracting other wage coverage (e.g., disability insurance coverage) from the monthly statutory maximum rather than the actual wages losses.

An exception to the general rule about the voluntary coordination of health care coverage involves ERISA health coverage through a "qualified" plan. That is, if your employer self-funds an ERISA health plan that clearly and unambiguously states it does not cover medical expenses related to an auto accident, then the PIP carrier is primary despite the fact that you paid for coordinated coverage. This is true even though your no-fault policy likewise clearly and unambiguously coordinates coverage in its favor. An exception to this exception is when the ERISA plan purchases coverage rather than is a self-funded plan.

Another exception is Medicare and Medicaid, which are secondary to your PIP coverage, which is primary.

A few words of caution: if your primary carrier is a HMO/PPO/PPOM or other form of managed health care, you must first seek health care “within the network.” If you elect to treat outside your network, then you must first seek the proper referral or preauthorization according to your health insurance plan's requirements. Failure to follow your health insurance policy's requirements regarding the circumstances under which you must seek a referral or preauthorization for treatment may release your PIP carrier from any obligation to pay health care bills not preapproved or not subject to the proper referral procedures. In other words, the financial burden would fall on you to pay those bills. Please make sure you follow all referral and preauthorization procedures outlined in your health insurance contract.

On the other hand, you may purchase an uncoordinated/full benefits policy. Here, your automobile insurance carrier generally is liable for PIP benefits even though they have been paid under another insurance policy. For example, if your health insurance pays accident related medical bills totaling $10,000, the no-fault carrier must pay you the same amount. Therefore, the advantage of an uncoordinated PIP policy is that you are legally entitled to "double-dip." The advantage of a coordinated policy is premium savings each year.

Your no-fault carrier may offer at a reduced premium rate a PIP deductible of $300. Such a deductible will be specified in the policy of insurance, or on an endorsement or declaration sheet.

Whose Insurance Policy Pays PIP Benefits: Yours or Someone Else’s Insurance Company?

Motor Vehicle Accidents. This can be tricky, and the general rule is that PIP insurance covers people not vehicles. Therefore, if at the time of an accident

  1. If you occupied a motor vehicle and you are a named insured on a no-fault automobile insurance policy, you must first make your claim against it for PIP benefits;
  2. If you occupied a motor vehicle and you are not a named insured in an automobile insurance policy, then you must make a claim on the automobile insurance of a spouse or relative of you or your spouse domiciled in your same household for PIP benefits.
  3. If you occupied public transportation at the time of the motor vehicle accident, but you are not entitled to PIP benefits under another policy, then you must make a claim for PIP benefits with the insurer of the public transportation’s vehicle, subject to certain exceptions.
  4. If you occupied a vehicle furnished by an employer to you, your spouse or a relative domiciled in the same household, then you must make a claim first with the insurer of the employer-furnished vehicle.
  5. If you occupied a motor vehicle but are not otherwise insured as stated above, then your must look primarily to the owner or registrant of the occupied vehicle. If the occupied vehicle’s owner/registrant is uninsured, then you must look to the occupied vehicle’s driver.

If you did not occupy a motor vehicle at the time of the accident (i.e., pedestrian or bicyclist), and neither you nor a resident relative are a named insured on motor vehicle coverage, you must obtain no-fault coverage in the following order of priority:

  1. The insurers of the owner or registrant of the motor vehicles involved in the crash; then
  2. The insurers of the operators of the motor vehicles involved in the crash.

If none of the above coverages apply, then you must look to the Michigan Assigned Claims Plan.

Motorcycle Accidents. An operator or passenger of a motorcycle injured in an accident involving a motor vehicle must seek PIP benefits from insurers in the following priority:

  1. The insurer of the owner or registrant of the motor vehicle involved in the accident;
  2. The insurer of the operator of the motor vehicle involved in the accident
  3. The automobile insurer of the operator of the motorcycle involved in the accident; then
  4. The automobile insurer of the owner or registrant of the motorcycle

If there is no coverage from any of these sources, then the operator or passenger must look to his/her own or resident relative’s no-fault coverage. If none of the above coverages apply, then you must look to the Michigan Assigned Claims Plan.

The Claim for PIP Benefit

The no-fault law has uncompromising and perplexing time limits within which you must claim and obtain benefits. There are two, related one-year statutes of limitations. First, unless you have furnished the PIP carrier a written notice within one year of the accident, or the insurance company has paid some benefit to you, you must file suit within one year of the accident to recover benefits.

If you have given written notice or your insurance company has made payment within one year of the accident, then you must sue for each unpaid expense within one year of the most recent allowable expense incurred. If you file suit timely, you may recover those expenses that you incurred not more than one year before the date the complaint was filed.

The written notice mentioned above must follow a specific form for easy insurance company processing. It must give the name and address of the claimant and indicate, in ordinary language, the name of the person injured and the time, place and nature of his injury. The no-fault PIP Application (usually an 8½” x 14” yellow or white form) satisfies the notice requirements.

The Lawsuit for PIP Benefit

If your auto insurance company refuses to pay benefits or pays them inadequately, incompletely or late, you may have no choice but to file suit. This lawsuit involves a breach of the contract by your insurance company, and it is unwise to undertake this without a lawyer on your side. Such a suit involves your court Complaint, which starts the lawsuit, followed by the insurance company's Answer To The Complaint, which denies responsibility. Then each side trades written questions known as Interrogatories that the other side must answer. This is sometimes followed by your deposition and the deposition of your doctors, independent medical evaluators and other witnesses. If the case still is unresolved, it may go to mediation, case evaluation and trial. The whole process may take a year or more.

If your suit proves successful, benefits may be payable with 12% per annum interest. In addition, if the Court determines that your insurance company acted unfairly when dealing with you, your attorney is entitled to a reasonable fee for his services.


The next claim the Michigan No Fault Automobile Act authorizes is against the at-fault, negligent driver for non-economic injuries. These damages include conscious pain and suffering, lost enjoyment of life, mental and emotional distress, and lost love and companionship, for example. Also, as stated above, if your accident related economic damages exceed those your PIP insurance paid, you may be able to sue the negligent driver for them as well. For example, if your monthly wage losses exceed the monthly, statutory maximum, you may sue to collect the excess. You may sue also for excess funeral and burial expenses, and medical bills.

The Threshold Injury Requirement

In most negligence cases, you must prove the person who injured you was negligent. Under the No Fault Statute there is an additional element: you must also prove one or more of three threshold injuries in order to obtain compensation: 1) death, 2) serious impairment of a body function, or 3) permanent serious disfigurement. Consider these threshold injuries as hurdles that you must clear in order to go from injured but uncompensated to injured and compensated.

The "death" threshold is obvious.

Most cases involve "serious impairment of a body function” which is not so clear. This threshold is defined as an objectively manifested impairment of an important body function that generally affects the person's general ability to lead his or her normal life." An accident leaving you wheelchair-bound for life is an obvious and indisputable "objective manifestation." An automobile accident in which you sustained a small scratch on your leg, and for which you didn't seek treatment, may constitute an objective injury, but may not have affected your "general ability to lead . . . [a] normal life"; so you likely did not sustain a threshold injury and cannot sue. If a drunk driver rear-ended you, resulting in neck and upper back muscle strain, requiring six or seven months of treatment, including heavy doses of muscle relaxers, you were out-of-work or school for five or six months, and needed help taking a bath because you couldn't move your neck or arms, then you may have sustained a serious impairment of a body function. A judge may not let your case get to the jury, if there is no material, factual dispute on the nature and extent of your injury. However, if there is a dispute, then your case will probably be decided by a jury.

A graphic example of clearing the "permanent, serious disfigurement threshold" would be a million dollars per year fashion model who sustained gnarled glass punctures in her face so that scarring prevented her from earning a living. Clearly, this would be a permanent, serious disfigurement allowing her to sue.

Also, the amended law requires a doctor to diagnose head injuries for your case to get to a jury. So, a neurologist, neurosurgeon, psychiatrist or neuropsychiatrist, as well as your family physician, must diagnose a head injury to secure your right to a jury trial.

The Motor Vehicle Negligence Lawsuit

Generally, you must sue the at-fault driver and vehicle owner for damages within three years of the accident date. There are exceptions when a minor is injured, or if the injury result in some type of legal incompetence, and a longer time for suing is permitted. However, these complicate the statute of limitations' requirements; so, it is extremely important to see an attorney immediately after your accident.

A jury may not issue an award of non-economic damages if you were more than 50% at fault. This would prevent drunk drivers, for example, from suing. Also, you may not sue for non-economic damages if, while driving your own vehicle, you had no automobile insurance covering you.

In addition to being able to sue the at-fault driver of the other vehicle, you may sue the owner of that vehicle. Here, your attorney must show that the at-fault driver drove car with the owner's knowledge or permission.

In the event you file a third-party suit for excess economic damages, you need not prove a threshold injury.

Other Considerations

Unlike PIP and bodily injury coverage that the Michigan No Fault Automobile law mandates, the majority of auto insurance companies in Michigan offer optional uninsured (“UM”) and underinsured (“UIM”) motor vehicle coverage. UM coverage provides an insured person the ability to seek from his or her own insurance company any damages that would otherwise be allowable from the uninsured motorist, including damages for pain and suffering. With UIM, the injured, insured person makes a claim with the at-fault party’s negligence coverage. If, however, that coverage is insufficient to fully compensate the injured, insured person, then he or she may make a claim under his/her UIM coverage for the difference between the recovery from the at-fault party and the UIM policy limits.

The period of time for filing a suit or demanding arbitration for UM and UIM claims are governed by injured, insured’s insurance policy’s language itself, which is usually 3 or 6 years, but can be a short as 1 year from the date of the accident.


A third claim the Michigan No Fault Act authorizes is the right to repair or replace your vehicle. To do this at an insurer's expense, however, you must purchase optional collision or comprehensive automobile insurance. Without this type of coverage, you will not be compensated for damage to your car by another's negligence, except under the following three conditions:

You sue the at-fault driver under the mini-tort law in Small Claims Court. If you can prove another person was at fault, you may obtain from his insurance company $1,000.00 or the amount of your collision or comprehensive coverage deductible, whichever is less.

You may sue the at-fault party if he intentionally caused harm to your vehicle.

You may sue a negligent driver if he was uninsured.

A suit against your automobile insurance for such property damage must be brought within the time period outlined in your automobile insurance policy, which is usually, but not always, 1 year from the accident date. If none is mentioned, then you have 6 years from the accident date to sue your carrier. A suit against the at-fault driver's vehicle owner's insurance must be brought within one year of the accident date. Also, if the at-fault party intentionally causes your crash or was uninsured, you must sue him within one year of the crash.

Failure to sue under any of the scenarios above will bar suit after these limitation provisions expire.


If you or anyone you know has experienced death, serious personal injury, or property damage in an automobile crash then consult an attorney immediately. Insurance companies do not always disclose all PIP benefits available. An attorney will be able to secure for you appropriate no-fault benefits.

Many times, the insurance company will discourage you from hiring legal counsel, then attempt to engineer a settlement of first-party, third-party or collision coverage benefits. While it is true that insurance company representatives omit occasionally to advise you of your full scope of rights, invariably it happens. Also, insurance companies will frequently negotiate with you to pay the least amount of money possible.

Insurance companies may stretch settlement negotiations until the statute of limitations has elapsed, then end negotiations altogether. Under these circumstances your rights are likewise cut off.

Statistics show that upwards of 95% of auto negligence cases settle without going to trial. However, a quickly shrinking number of cases settle before you file suit, because insurance companies like to keep their money and invest it until they absolutely have to pay you. By delaying hiring an attorney, you likewise delay receiving compensation for your injuries

It is, therefore, important for you to be represented by legal counsel immediately after an auto accident, if for no other reason than to guarantee your rights are championed. Don't surrender your right to compensation!

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