What is the Michigan No-Fault Act?
Written by: Thomas M. DeAgostino

The No-Fault Automobile Insurance Act attempts to make it easier for a person injured while owning, operating, maintaining, or using a motor vehicle to obtain medical treatment, recover wage loss and the cost of home care among other economic losses

WHAT ARE YOUR DUTIES?

If you are the owner or registrant of a vehicle in Michigan, you must purchase an auto insurance policy which provides for the minimum coverage’s listed below: •Personal Protection Insurance (PIP). These benefits provide coverage for “accidental bodily injury” arising out of use of a motor vehicle. •Property Protection Insurance This provides coverage for damage you cause to another person’s property while using your motor vehicle. •Residual Liability Insurance This provides coverage for both out-of-state accidents and suits brought against you as a result of your use of a motor vehicle. Failure to satisfy these requirements can result in criminal sanctions. For a claim to fall under the No-Fault Act, an accident must involve at least one motor vehicle. Thus, an accident between a car and another car or between a car and a pedestrian would be covered, but an accident between a motorcycle and a pedestrian would not by covered under the Act.

WHO IS COVERED?

There are several categories of individuals who are covered by the protection of the No-Fault Act. These individuals can be separated into five groups: •Persons named in the insurance policy •Spouses of persons named in the policy •Relatives of either the policyholder or his/her spouse who live in the same household. •Operators and passengers of the vehicle involved in an accident. •Employees of the owner or registrant of the motor vehicle and their spouses and relatives who live in the same household.

WHAT IS COVERED?

•Medical Expenses. These expenses must be reasonable and necessary for the injured party’s recovery. Your Insurance Company must pay for these expenses for as long as treatment is necessary. •Wage Loss. If an individual is not able to work, then for the three year period following the accident, the injured person is entitled to the lesser of 85% of her monthly wage loss or $4,929.00 per month, as of January 2011. •Replacement Services. If an individual must pay another person to perform domestic services, child care etc., the no-fault insurance policy must provide for reimbursement of up to $20.00 per day to the injured party for the three year period following the accident. •Rehabilitation Expenses.

HOW DO I GET MY WAGE LOSS AND MEDICAL BILLS PAID?

You must fill out an Application for No-Fault Benefits Form (Benefits Form). It is obtained from the automobile insurance company responsible for paying your First Party Benefits. This Benefit Form has 3 places for you to sign, two on the bottom front and one on the back. Many people forget to sign the back page and it holds up payment of their benefits. It is important to fill out this piece of paper accurately for it may be obtained and used against you by the at-fault driver's insurance company to discredit you as to your version of the accident and the injuries you are claiming. Many people do not give an all encompassing list of everything that hurts them. As a result, some may argue that you are claiming a "new injury" that is not listed.

HOW MUCH OF MY WAGES WILL THEY PAY?

You are entitled to 85% of your wage loss. The 15% difference is for taxes. If you can show you were in a lower tax bracket then 15%, you could be paid a higher amount. There is a maximum monthly wage loss amount the insurance company is responsible for paying. It goes up a little bit each year to compensate for inflation. As of 2011, the maximum wage loss available per month from an automobile insurance company was $4,929.00. Typically, this amount increases by $60.00 to $100.00 each year. If you are earning more than the monthly wage amount, the difference between the Maximum Monthly amount and 85% of the actual amount that you earn per month, may be obtained and claimed in your Third Party Claim against the negligent driver/owner of the other vehicle involved. If you are Temporarily Unemployed, such as a school teacher not working during the summer or recently out of work but actively seeking employment you may be entitled to receive work loss benefits.

WHAT IF THE ACCIDENT INVOLVED A DEATH?

The applicable auto insurance company is liable for certain benefits to the surviving dependents of the deceased. There are two types of Survivor's loss benefits. The first, replaces "contributions of tangible things of economic value." This has been held by courts to cover more than just wage or salary income. The second covers replacement services. There are many factors to consider, but this generally means potentially receiving: 1. Replacement services $600 a month for 3 years; 2. Up to the Maximum Wage Loss Amount per month for 3 years; The monthly combined maximum for BOTH cannot exceed the Maximum Wage Loss Amount.

A FINAL NOTE

This pamphlet is designed to give a brief description of the No-Fault Insurance Act. It would be a mistake to rely solely on this source as a means of answering all of your questions about the No-Fault law. Because the law is constantly changing, the issues that seem clear in this presentation are actually quite ambiguous in their application. The sad fact is that the No-Fault system, although designed to curb litigation, has led to a great many lawsuits. The Act has left many questions unanswered and its terms are open to a variety of interpretations. As a result, if you are injured in an automobile accident, it is important that you understand your specific rights under the Act. If you are injured or you simply have questions about the law, you should seek information from the source with the most accurate answers, an attorney. THOMAS M. DeAGOSTINO, Esq. (248) 377-1700.