The No Fault Act in Michigan was modeled after Uniform Motor Vehicle Accident Reparations Act and the Motor Vehicle Basic Protection Insurance Plan. Many states have adopted the no fault system and many states since adopting the no fault system have gone back to the common law system due to the complex nature of the no fault act, some of the injustices of the no fault act and the higher cost of insurance under the no fault act.
“Many legislators want to change the fund and want to get rid of the unlimited medical payment, but if this is done, the basic backbone of the No Fault Act would be compromised, and if that is done, the entire act should probably be scrapped and a return to the fault system should be strongly considered. This is especially true since the advent of Obamacare that requires all persons to have health insurance.”
As stated previously, some other states have adopted no fault systems. Some provide for a floor of medical treatment to be provided by your own insurance carrier ($5,000) and some states require the medical expenses provided be exhausted before you can file a law suit against the at fault driver. However, no state that I know of provides the comprehensive system allowed by the Michigan No Fault Act.
How Are My Medical Expenses Paid?
In Michigan under the No Fault Act 100% of your medical bills that are related to the auto accident are paid for the rest of your life by YOUR insurance carrier. This is an almost unheard of benefit. Medical expenses can be astronomical and the insurance industry had to set up a re-insurance scheme to prevent several cases of a catastrophic nature from bankrupting them. The Michigan Catastrophic Claims Association (MCCA) is funded by the various insurance companies and has a right to collect its own payments by way of a supplemental bill to all drivers in Michigan.
At the bottom of your bill, you will many times see a bill labeled CCI or CCF. This is to provide a reserve of money for all Catastrophic Cases. Originally, cases with medical bills greater than $250,000 qualified to receive funds from the MCCA, but now the medical bills must be greater than $500,000 to qualify to receive funds. Although the MCCA is run by the state of Michigan, it need not report it’s reserves. This has upset many legislators who claim the fund has over two billion dollars in reserve and thus money should be given back to the public and/or that auto insurance premiums should not be going up. In any case, Michigan provides unlimited medical expenses. This is a truly a very valuable benefit and that should not be compromised.
How Much Wage Loss Can I Collect?
The Michigan No Fault act also requires YOUR insurance carrier to pay 85% of your actual wage loss wages from the date of the collision for up to three years, Ouelette v Kenealy 424 Mich 83 (1983); MacDonald v State Farm 419 Mich 146 (1984). The maximum you can receive is adjusted yearly for inflation and the present maximum per year is as well.
Why Do Replacement Services Provide So Little?
The Michigan No Fault Act requires YOUR insurance carrier to pay $20.00 per day for three years of replacement services. Replacement services are things the injured person can no longer do around the house like cleaning dishes, washing windows, cutting the grass and other similar tasks. The person providing these services must document their time and submit the charges timely and usually require a medical script. Unfortunately, the replacement services were not adjusted for inflation and still provide only $20.00 per day. The same rate as it was in 1973. This is a scandal and should be addressed.
Attendant Care Is a Medical Benefit and Thus Unlimited
The Michigan No Fault requires YOUR insurance carrier to pay for 100% of all attendant care for the rest of your life. Attendant care is considered a medical benefit and thus is unlimited. Attendant care is care that is given for personal needs such as bathing, bathroom, dressing, bandage changing, medication, and oversight of the patient. Therefore, if you are a quadriplegic or a very injured person requiring a lot of outside support, this is paid for. Again the persons providing this type of care, whether professional or by family member, must chart their time and activities and timely submit the bills. A medical script for these services is required.
Provides Minimal Vehicle Protection. You Must Purchase Additional Insurance.
If you purchased collision coverage for your car, your insurance company will pay the damages for the repair or replacement of your vehicle pursuant to the terms of your policy. If you did not purchase collision Coverage, you WILL NOT get any money for the repair or replacement of your vehicle, except up to an amount equal to or less than $1,000.00 if you can prove the other party to the collision was at fault. So, if you did not get collision coverage on your car (too expensive, car is too old, ect.) the most you can collect is $1,000. This is only after you prove the other driver is at fault for the accident. Harsh, but that was part of the trade-off for No Fault.
Pain & Suffering and Wage Loss Beyond Three Years
Under the No Fault act, you ARE NOT entitled to pain and suffering UNLESS you have suffered an injury resulting from the auto accident that is considered under the law a serious impairment of a bodily function. It must be a permanent and serious disfigurement or death and you must prove the other party is at fault for the accident. If you can prove you have a serious impairment and fault, the at-fault driver will have to pay you for your pain and suffering.
What is or is not a serious impairment of body function is a factual question to be ruled upon by the court. If there is a dispute of fact, is will be ruled by a jury. However, if the court or the jury does not believe you have met this “threshold”, then you receive nothing for your pain and suffering.
You DO NOT have to prove a serious impairment or meet a threshold to collect wage loss beyond three years, but in truth there are very few cases (they do exist) where you can be off work or lose more than three years of wages and not be seriously injured. Again, you would have to prove the loss of wages for more than three years and the other party at fault in the accident, in which case the at fault party would be required to pay.