In a Motor Vehicle* accident there are basically two types of claims:

The First Party Claim deals with an auto insurance company paying for the following benefits:

First Party Benefits are payable to anyone who suffers an injury "arising out of* the ownership*, operation*, maintenance* or use* of a motor vehicle* as a motor vehicle*". First Party benefits are available regardless of fault. Even if the accident was 100% your fault you are entitled to No-Fault benefits if you fit the definition above.

The Third Party Claim deals with the negligent driver/owner potentially paying the victim or family compensation for pain and suffering or other applicable damages.

"Allowable Medical Expenses" means:

The Third Party claim is against the driver and/or owner of the other vehicle* involved and may compensate and pay restitution to the victim(s) (or family, if deceased) for their pain and suffering, disfigurement*, death and/or excess wage loss. The other driver and/or owner of the other vehicle must have been negligent in some way that caused the injury.

In order to receive even a dollar for your pain and suffering in a Third Party case, even if a drunk driver rear ends you, you must have a "Threshold Injury" which is defined as one of the following:

1. • Death; or
2. Serious disfigurement; or
3. Serious Impairment of an Important Bodily Function*.

Most cases fall into the third category of Serious Impairment of an Important Bodily Function*. This is a legal term and is defined by statute as follows:

 

1. The injury must be "objectively manifested." This means it is medically identifiable or the condition has a physical basis; and
2. Injury affects an important body function; and
3. The injury affects the victim's general ability to live his or her normal life.

The Statute of Limitations or time a person has to file a Third Party lawsuit is three years. If you do not bring a lawsuit within three years of the date of the accident, a Court will bar (not allowed by law) you from bringing a suit afterwards. If alcohol is involved, see the later section entitled, "Dramshop Actions."


Excess wage loss (economic loss which exceeds the statutory No-Fault maximum) is available if you are restricted from work for more than three years and/or if you make more than the maximum benefit amount for wage loss per month. The maximum amount goes up each year. It presently is $5451 (2018). It goes up on the average of $60 - $100.00 per year.

If you, the victim, were more than 50% at fault or responsible for the accident, then the driver/owner (or their insurance company) does not have to pay any money under a Third Party Claim or suit. In other words, if you were more than 50% negligent, the other driver/owner, even if they were negligent in some way, is not responsible for paying any damages under a Third Party Claim.

The percent of your negligence is a matter of opinion and should be discussed with a competent attorney. Again, just by reading this information, do not assume that you do not have a case.
 

If you are the driver and owner* of an uninsured car, truck or vehicle*, (this does not apply to motorcycles), you are barred (you cannot) recover compensation for pain and suffering and other Third Party Benefits.

It must be known that "Owner*" is defined under the No-Fault Law. You are the Owner* if you had use* of the motor vehicle for over 30 days, or if your name is on the title or registration. If your vehicle* was uninsured at the time of the accident, you should contact an attorney because there are certain nuances or exceptions that may apply to allow you to recover. You should never assume just by reading this booklet that you do not have a viable claim.

There are special rules if you are in an Employer Furnished Vehicle or in Public Transportation, and Vehicles for Hire which includes buses, cabs, limos, ambulances and hearses. I will not go into detail of these since they are as common. Contact an attorney to discuss these situations.

After determining which automobile insurance company is responsible for paying your First Party benefits, (wage loss, medical bills, replacements and medical mileage) you must make a claim with the correct auto insurance company or Facility.

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.

Writer's Tip: 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 on the Benefit Form.

Once the Benefits Form is received by the insurance adjuster, there are two important documents that the adjuster needs before s/he can pay wage loss and other benefits:

 

The Wage Verification Form is filled out by your employer or payroll department swearing that you were working at the time of the accident or had an Expectation of Employment* with their company, the hours that you worked, the amount you made, etc. It is this form the adjuster will use to figure out how much to pay you.

The doctor's Disability Certificate is filled out by your doctor, and indicates that you are restricted from doing certain things because of your injury and that your injury is related to the motor vehicle accident.

Writer's Tip: Many doctors simply write "patient can't work from (date) to (date)." This form is not complete enough to pay you Replacement Services because it does not specifically state "restricted from Household Activities or chores".

Individuals that have their own businesses are generally looked at with great scrutiny. Usually they cannot show pay stubs and the adjuster may request copies of past tax returns, 1099's, etc. Further, they may forward the job of ascertaining wage loss to an accounting firm who will ask you to sign IRS authorization forms so they can directly access all tax documents.

Once the adjuster receives the Wage Verification Form and the Disability Certificate and/or any other documentation necessary to evaluate whether you are entitled and how much to pay First Party benefits, they have 30 days to not pay or deny the claim. Failing to pay these items within 30 days subjects the auto insurance company to having to pay interest.

SUMMARY: The adjuster needs the following before they can 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 2018, the maximum wage loss available per month from an automobile insurance company was $5,451. Typically, this amount increases by $60.00 to $100.00 each year.

If you are earning more than the monthly wage amount, the overage or 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.

A couple of examples for clarity are as follows:

Example Number 1: If you earn $1,000.00 per month you would be entitled to 85% of that amount ($850.00) from the appropriate auto insurance carrier.

Example Number 2: If you earn $10,000.00 per month before taxes, you first calculate what 85% of your gross earnings would be. In this example that would be $8,500.00. This 85% amount is more than the No-Fault's Maximum Monthly Wage amount. Therefore, you would only be entitled from the applicable auto insurance company the maximum monthly wage amount.

As of this writing it would be $5,451 per month. Remember the excess wage loss may be obtained through the Third Party Claim or suit.

Example Number 3: If you are not actually working for a company at the date of the accident, but you had a job lined up that you were not able to start because of the accident, you may qualify as "Temporarily Unemployed"* or having the Expectation of Employment, and thus be entitled to First Party Benefits.

Also, if you are Temporarily Unemployed*, such as a school teacher not working during the summer or a factory worker who was temporarily laid off for one month whose company would have put him back to work, you may be entitled to receive work loss benefits.

It is only with a motorcyclist, that the other vehicle (potentially) would be responsible for paying your First Party Benefits.

If you are the driver and owner* of an uninsured motorcycle, then the other vehicle involved does NOT have to pay your medical expenses. This is sort of a penalty for NOT having insurance as the law requires.

A motorcyclist is a special class of victim who still may recover pain and suffering compensation (Third Party Benefits) if they are the driver and owner* of an uninsured motorcycle. The reason for this is that a motorcycle is not defined as a "motor vehicle*" under the No-Fault law.

Further, a motorcyclist may be entitled to a special double dip recovery for medical bills. Many attorneys who do not specialize in this area are unaware of this nuance in the law. The circumstances as to when it is available are too detailed to go into in this limited space as to when it applies. Contact a legal expert in this specialized area.

The State of Michigan established the Assigned Claims Plan in 1973 to provide financial help to people injured by uninsured motorists.

The Plan is administered by the Michigan Department of State under authority of the No-Fault Insurance Law.

You will note that in the earlier section entitled, "Who Pays for My First Party Benefits?", that the 5th company or facility potentially responsible for paying your First Party Benefits is the Assigned Claims Facility. If you exhaust the other four potential insurance companies, then an Application to the Assigned Claims Facility should be made.

The people eligible through the Assigned Claims Facility are:

- Any person injured in an accident in Michigan, while riding in or being struck by an uninsured Michigan registered vehicle, and who has no insurance to pay the resulting bills;

- The survivor of someone who has died in a motor vehicle accident may also be entitled to benefits through this facility;

- Motorcyclists are eligible if they have been in an accident with an uninsured motor vehicle (Not another motorcycle), and do not have other insurance to cover the resulting medical expenses.

People NOT eligible for Assigned Claims Facility:

- Owner(s)* of an uninsured car or motorcycle who was injured in an accident while driving or riding in his or her own vehicle or motorcycle;

- Drivers of stolen vehicles or motorcycles;

- People that have automobile insurance coverage that will pay these benefits.

The assigned claims facility may reimburse the following:

- Reasonable* charges for medical care, recovery & rehabilitation;

- Up to $1,750.00 for funeral and burial expenses;
- Lost wages for up to 3 years after the accident;
- Lost wages and expenses to a survivor for up to 3 years after the victims death;

- Up to $20.00 per day for services such as transportation, home maintenance or other tasks the victim cannot perform because of their injury;

- The Plan does not cover property damage claims.
 

You must fill out an "Application for Bodily Injury Benefits" (NF-21). You may obtain one at any Secretary of State branch office or by calling or writing:

Assigned Claims Facility
Michigan Department of State
Lansing, MI 48918-1412
(517)-322-1875

Time Deadline: An Application requesting benefits must be filled out within one year of the accident. Minors have until one year after reaching the age of 18 to file a claim.

WARNING/CAVEAT: All bills and medical expenses must be submitted promptly; that means within one year after the date the expense is incurred or it will not be paid.

If the accident happened while you were out-of-state, involved an out-of-state driver or any unusual circumstances, we recommend contacting an attorney specializing in this area to answer any questions or call the staff at the Assigned Claims Facility.

If the negligent driver hit you and took off and you cannot identify him or his vehicle, then you are still entitled to First Party benefits as described earlier.

How do I receive compensation for my pain and suffering, serious disfigurement or death if I don't know who the owner is?

You may still be entitled to compensation for Third Party Benefits (pain and suffering, excess wage loss, etc.) if there is special insurance coverage on your vehicle, a vehicle in your household or the vehicle that you were in. The special coverage is called Uninsured Motorist Coverage. A good insurance agent will make sure you have it.

Uninsured Motorist Coverage is inexpensive and a policy for $50,000 worth of coverage can be purchased for as little as $20 per year. If you, your family or friends do not have this coverage, I recommend at least $100,000.00 worth of coverage.

You can tell if you have Uninsured Motorist Coverage by looking at the Declaration Page of your Insurance Policy. The Declaration Page is the 8x10 piece of paper received from your agent or insurance company that describes the type of coverage you have purchased. Uninsured Motorist Coverage may be abbreviated as "UM."

In order to recover compensation, the injured party is still subject to the same prerequisites. The major one being the victim must suffer a Serious Impairment of an Important Bodily Function*, serious disfigurement*, or death. A major difference in UM claims is who hears the case. A UM claim does not go to a judge or jury to be decided; it is ultimately heard by an Arbitration Panel of attorneys acting as the decision makers.

There is also a requirement that your vehicle actually come in contact with another vehicle.

WARNING/CAVEAT: During the initial statement or claim that you make with your insurance company the adjusters are trained to obtain information to determine whether contact was made between the vehicles.

Example: A car swerves in front of you, you slam on the brakes, lose control and hit a tree without hitting the car that swerved, and the vehicle leaves the scene, you will not be able to make a claim for your Third Party Benefits (Pain & Suffering) under your UM coverage because there was not actual contact between the vehicles.

OTHER RECOMMENDED INSURANCE: Another important type of insurance coverage is called Underinsured Motorist Protection. If the negligent driver/owner that caused the accident has a small insurance policy that does not compensate for the full extent of your injuries, then you may obtain the excess value of your injuries from your own insurance company.

An example will help explain: If you shattered your leg, had surgery and will limp for the rest of your life, your injury arguably could be worth $100,000.00 under a Third Party claim. If the negligent driver/owner only has a $20,000.00 policy and you purchased from your own insurance company Underinsured Coverage for $100,000.00 you potentially may recover the $20,000.00 of the negligent driver/owners insurance company and an additional $80,000.00 from your insurance company totaling $100,000.00.

NOTICE/CAVEAT: It is imperative that you get the full dollar amount of the negligent driver/owners insurance policy because it is a prerequisite for obtaining any money from your Underinsured Coverage. There may be other contractual duties that you have under your insurance policy that may affect your ability to recover the additional monies. Again, contact an attorney specializing in this area, so that you do not give up your rights to full compensation.

When a victim dies as a result of an accident involving a vehicle, not only is Michigan's No-Fault Law applicable, but so is Michigan's Wrongful Death Act.

Ultimately an Estate must be opened and a Personal Representative appointed by the Court to stand in the shoes of the victim and sue, on behalf of the Estate, all potentially responsible parties. Any proceeds obtained are proceeds of the Estate and distributed to those who qualify to receive them under the law. If negligence is proven and a recovery is made, the Court must authorize the settlement and the distribution of the assets from the personal injury lawsuit.

If there is a Will, the deceased probably has named someone as his or her Personal Representative; that person would probably be appointed by the Probate Court. In the absence of a Will, the following is a list of the people who have priority of becoming Personal Representative:

 

WARNING/CAVEAT: Letters of Authority are issued by the Probate Court giving the Personal Representative the power to sue. The date of the issuance of the Letters of Authority is a significant date because a two year Statute of Limitations period may begin to run when the Personal Representative has the capacity to bring a lawsuit. Check with an attorney for specifics.

Arrangements can be made to have the Court order Co-Personal Representatives (more than one person) to serve as Personal Representative. The person with the highest priority under the law can waive his/her right to be Personal Representative and appoint someone else who has priority; this is subject to Court approval.

The Personal Representative of the deceased's Estate has the power to hire a personal injury attorney and make decisions on behalf of the Estate such as payment of debts.

The damages that can be sued for in a Wrongful Death action include:

Those persons entitled to recover damages in wrongful death actions are described by statute, MCLA 600.2922(3), but its provisions are broad and are subject to court and judicial interpretation. The persons who may be entitled to damages under the Wrongful Death Act are limited to any of the following who suffer damages and survive the deceased: (a) The deceased's spouse, children, (this includes adopted children) descendants, parents, grandparents, brothers and sisters, and, if none of these persons survive the deceased, then those persons to whom the estate of the deceased would have passed under the probate laws and the laws of the State of Michigan. (b) The children of the deceased's spouse (This would include decedent's step-children). (c) Persons named under the will/trust of the deceased, if not violating Michigan law. Other persons with special standing or relationship with the deceased may be entitled to compensation. The above list should not be considered as all inclusive. Please contact an attorney that specializes in this area.

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 brakes down to potentially receiving:
• Replacement services $600 a month for 3 years;
• Up to the Maximum Wage Loss Amount ($5,451 for 2018) per month for 3 years;
The monthly combined maximum for BOTH will not exceed the Maximum Wage Loss Amount. Therefore, in a 2018 claim, the surviving dependents will never receive more than $5,451per month

There are a couple of different times an insurance adjuster may wish to record a statement. The most common is when you call to file the claim. They ask to record you and get your version of what happened, your injuries, etc. This may be necessary to open the claim. If your case is unusual or involves severe injuries, you should first consult an attorney.

The second and more formal recording of your testimony is called an Examination Under Oath (insurance term "EUO"). Your own insurance company may be responsible for paying for the First Party Benefits. Under the contract that you have with the insurance company they have a right, before paying any benefits or honoring a claim, to have one of their adjusters or attorneys question you under oath. The purpose is to obtain answers to any questions pertaining to the injury and your Application for Insurance.

A EUO is typically done if they believe there is any type of fraud or untruthfulness on the initial Application for Insurance or with the claim itself. An example that often leads to a EUO is when a car is owned by a son, but insured through one of the parents to obtain lower rates. The information obtained through the EUO may be used to deny the claim. This could mean that you may now be responsible for medical bills and not receive your wage loss and other First Party Benefits.

Writer's Tip: You should have an attorney representing you if you are requested to submit to a EUO.

After an injury accident you should check to see whether your auto insurance policy is Coordinated or Uncoordinated. Another word for coordinated coverage is full coverage.

If you have full coverage you paid more for it. It bought you the potential right to be paid into your pocket the dollar amount of your medical bills. Most policies however are coordinated.

In order to obtain this "double recovery", a medical expense must be paid by your health insurance company and your health insurance policy must also be uncoordinated. Most HMOs, PPOs, etc., are issued as coordinated policies which would defeat the ability to double recover through your First Party carrier.

An example will make it more clear: Your were injured while driving your insured car. Your emergency room bill and hospital stay of $5,000.00 was paid in full by your uncoordinated Blue Cross/Blue Shield policy.

In checking your automobile policy you learn that you opted for full or uncoordinated coverage. You now can submit to your auto insurance carrier the $5,000.00 bill that Blue Cross paid and evidence of Blue Cross' uncoordinated policy and your auto insurance company should be obligated to write you a check for $5,000.00.

If you had a coordinated Blue Cross Health Insurance Policy and it only paid a portion of the medical expenses, the unpaid portion should be paid by your automobile insurance company.

Example: The hospital bill is $1,000.00 and Blue Cross only paid $800.00 of it, the applicable auto insurance company should pay the difference; here, $200.00. (Again, the bill has to be reasonable*)

Writer's Tip: Should you be able to choose whether your health care coverage would be coordinated or uncoordinated and the expense to have the uncoordinated coverage is minimal, I recommend purchasing it. Remember, if you do have the uncoordinated health insurance, you should also purchase the uncoordinated or full coverage under your auto insurance policy or you will never be entitled to double recovery as stated above.

If the at-fault driver in your accident was under the influence of alcohol*, you may have an additional claim or suit against an additional defendant or defendants. This may open the door to more individuals or entities that have insurance policies that could pay compensation.

The name for the cause of actions that involve alcohol are called Dramshop Actions. A Dramshop Action is an action for personal injuries and/or property damage arising out of the unlawful furnishing of alcohol by someone or some company with a liquor license.

If the person furnishing the alcohol did not have a liquor license they may still be responsible under the general theories of negligence and/or social host liability law. There are certain unique aspects of Dramshop cases. Some include:

An adult driver must have been visibly intoxicated at the time s/he was served alcohol. This is not required if a minor was served alcohol.

When you obtain insurance on your vehicle, you choose whether to get Collision Coverage. With our No-Fault law, we do not point the finger at the other driver to pay for the full damage to the vehicle. Your own insurance company, if you opted for the Collision Coverage, pays to fix your vehicle.

Your insurance company may require you to pay your deductible. If the at-fault driver is insured, she or he will only be responsible for the amount of your deductible, but not more than $500.00. This is called the Mini-Tort Exception to the No-Fault law.
An example will make it more clear.

Example 1: Suppose your vehicle cost $6,000.00 to repair, you had to pay your $500.00 deductible and the at-fault driver was insured. You can get your $500.00 deductible back from the other driver or his insurance company.

Example 2: The same as #1, but you did not have collision coverage. Again, the most you can get from the insured at-fault driver or his insurance company is $500.00.

 
Michigan's No-Fault law does not allow you to sue for the full damage to your vehicle. There are some exceptions. You can sue the at-fault driver for your vehicle's damage:

If you have opted and probably paid an additional amount for Broad Form insurance coverage and the motor vehicle accident was not substantially your fault, your insurance company may waive your deductible. If you did not opt for Broad Form coverage, the insurance company probably won't waive your deductible.

Writer's Tip: It doesn't hurt to ask.

Certain governmental agencies and health insurance companies that paid you benefits related to your auto injury may have a lien and be entitled to reimbursement, partial or full, from your proceeds from any claim or lawsuit.

If you are receiving Worker's Compensation benefits or Social Security benefits for wage loss, the potential First Party insurance company has no duty to pay you. In other words, the First Party insurance company is entitled to a "set-off" from the benefits received from Workers Compensation or Social Security. Stated differently, you will not recover twice.

When Medicaid, Medicare or certain health care insurance companies pay your medical bills it could affect you negatively. Some doctors submit their medical bills to every insurance company or governmental program hoping one company or agency will pay.

If Medicaid or Medicare pays any of the bills and you ultimately receive a recovery for pain and suffering/Third Party claim, Medicaid/Medicare are entitled to reimbursement, in full or in part, for the bills that they have paid. This is a hardship to you because the reimbursement is taken out of your share of the proceeds.

Writer's tip: You should make sure that all of the medical providers are aware of the applicable automobile insurance company or Assigned Claims Facility that is responsible for paying your medical bills, so they don't automatically submit them to Medicaid or Medicare.

You do not want Medicaid or Medicare to pay for auto related treatment when a First Party carrier would be responsible. It is important to note that your attorney is under a legal duty to pay back Medicare, Medicaid and some health insurance companies.

Should for example, Medicare pay any of your medical bills and a settlement was reached for your Third Party case, you either have to pay Medicare the portion of their lien, or force the applicable First Party insurance carrier to reimburse Medicare. In either scenario, funds going into your pocket are severely delayed.

I hope this booklet gives you a basic understanding of your rights after a vehicle accident. It is my wish that you learned a few tips that will help you quickly process your claim and receive the benefits you are entitled to under the law. Please call for FREE advice. 1-800-708-5433

Attorney Jason A. Waechter


WARNING/CAVEAT: This material is not a complete and all encompassing informative guide to the law. Every year, the Michigan No-Fault Law changes in some fashion. New laws are passed and the Court of Appeals and the Supreme Court decide cases that change the law. As a result, we recommend that you contact a licensed attorney who specializes in this area of law.