Mi No Fault Insurance

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Purpose of No Fault

Back 1

to provide benefits (wage loss, replacement services, medical bills) to person sinjured in a motor vechile accident withotu requiring them to prove whose fault the accident was

Prevents tort actions below the no-fault threshold

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Traditional fault-based principles

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Party injured through the fault of another may bring tort action against liable party's insurer, regardless of severity of injury. This is a third-party action and usually covers medical expenses and wage loss, pain suffering.

In alternative, injured party may choose to have on insurer cover his expsens - first party action.

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No-fault (compared to traditional fault based principles)

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Screens out minor suits out of litigation process. No tort action (third party action) may be maintained between a covered D and a covered P UNLESS injury to P exceeds the no fault threshold. For D to be liable in trot, P must show that there was death, permanent and serious disfigurement or serious impairmetn of a bodily function that affects general ability to lead normal life arising out of oepartion of a motor vehicle, otherwise P msut seek benefits from own insurer.

Front 4

Whether P has sustained a "serious injury" is a question of law to be decided by...

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the court if the court finds either that (1) no factual dispute concerning nature and extent of person's injuries or (2) any factual dispute concerning nature/extent of person's injuries not material to determining whether it is serious injury

BUT, for closed head injury - issue fo rthe jury is created if licensed allopathic or osteopathic physican who regularly diagnoses or treats clsoed head injuries testifies under oath there there was serious neurolgocial injury

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Serious injury

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Objective manifestation of impairment - court must lookat P's life before and after the accident and consider significance of objectively manifested impairment on course of P's life. To see if P's general ability to lead normal life affected by impairment, court may consider factors like the nature and extent of impairment, type and length o treatment required, duration of impairment, extent of any residual impairment and prognosis for eventual recovery. IMpairmetn of short duation might be serious if effect on P's life is extensive.

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First Party Claim

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Contract - insurance coverage prerequisti to automobile registration so generally you are covered by your own insurer when in an acident.

Claim filed with insurer based in CONTRACT between owner/drive and his insurance company

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Third party claim

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Tort - if you suffer injury in car accident, you may have a 3rd party claim against the owner/driver of the other car based in trot/negligence.

TO show whether there is tort claim, you must meet MINIMUM THRESHOLD TEST by showing there was either:

1. death
2. permanent and serious disfigurement, or
3. serious impairment of a bodily function

Front 8

Minimum amt of coverage

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Insurance policy under no fault act must provide liability coverage of $20,000 per person, $40,000 per accident, and $10,000 for property damage at aminimum

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Property damage coverage

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Act doesnt provide trot liability on property damage.

EXCEPTIONS
1. Minitort provision allows small claims suits upto $500 for damage not covered by insurance (partial comparative negligence standard)
2. Liablity for intetnional harm to property (strict liability)
3. Liability for failure to secure no fault insurance coverage (strict liability)
4. Liability for damage to lawfully pakred cars (strict liability)

SOL - 1 year

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Minitort provision

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Allows small claims suits up to $500 for damages not covere dby insurance.

ARTIAL COMPARATIVE NEGLIGENCE STARNDARD - a party who is more than 50% at fault cannot recover any damages.

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Uninsured motorist coverage

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Optional under NO Fault Act and allows for injure dperson to collect from own insurance comapny provided that (a) he is not at fault, (b) coverage is stated within his policy and (c) negligent driver was uninsured.

SOL for uninsured motorist claims is SIX YEARS unless shortened by clear contractual provision written in policy

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Motor vehicle

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Defined as a vechile, including a trailer, which has more than two wheels and is operated or designed for operation upon a public highway

Motorcycles DO NOT APPLY - they are not required to purchase no fault insurance, but they must have perosnal liability insurance.

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Motor cycles

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Not required to have no fault insurance but must have personal liability insurance if designed for use on a public highway.

But if classified to be used OFF the public highway as an off road recreational vehicle (ORV), doesnt need insurance

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Motorcyclists may still receive no fault benefits

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Both on road and ORV

If involved in accident with a motor vehicle

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Parked vechiles

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Injuries arising out of ownership, operation, maintenance or use of a parked car NOT compensable exception 3 circumstances

1. Car was parked in way as to cause unreaosnable risk of bodily injury that occurred
12. Injury was a direct result of physical contact with equipment permanently mounted on the vehicle, while the equipment was being operated or used or property being lifted onto/lowered from the vehicle during the loading or unloading process unless injuyr occurred during cousre of employment

3. injury sustained by a person while occupying entering into or alighitnig fromt he vehcile unles injury ocurred during course of employment

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First party claims (contract action)

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Contract btwn insured and his insurance company (aciton between insured and insurer)

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Where injuries are caused by the insured-owner's vehicle, persons entiteld to benefits from the insured-owner's policy include....

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1. Insured, his spouse, or relative domiciled in the household
2. Operator of insured's auto
3. Passengers in the insured's auto
4. Non-occupants or pedestrians hit by insured's auto
5. Operator, passenger of a motor vehicle used in business of transporting passengers (buses, taxis)
6. Employee, her spouse, or household relative injured while occuping a motor vechile onwed or registered by employer

Front 18

Priorities

Back 18

All parties collect benefits from their own insuranc carriers (injure dparty - passenger, pedestrian, etc - collects form his own insurer rather than from driver's insurer). If injure dparty has no coverage, he collects from the insurer of a relative in his household who does have coverage. If no coverage, then he may collect from insurer of vechile in which he was a passenger.

NUT of motor vechile is operated in business of transporting passegners, the operator or passenger collects from the insurer of the motor vehile first if at the time of the acident the primary function or purpose was the transportation of passengers.

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Persons EXCLUDED from coverage under no fault act

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1. Person using unlawfully taken motor vehile or motorcylce unless person reasonably believed she was entiteld to use vechile
2. Owner of uninsured motor vechile or motorcycle (including a person renting or having use of the motor vechile for more than 30 days) that is invoved in injury-producing accident
3. Nonresident occupant of a motor vechile or motorcycle that is not registered in state and not insured that has filed certificate of compliance
4. EE for whom workers comp benefits are available who sustains injuyr in a PARKED VEHICLE in course of employment while loading, unloading, doing mechanical work, unless injury arose from use/op of another car OR entering/alighting from vehicle unless it is disabled or another vehicle is invovled

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Vehicles EXCLUDED from coverage under no fault act

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Parked vehicles, motorcycles, off-road, all-terrain, farm tractors

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noneconomic losses (pain suffering, disfigurement, humiliation, loss of consortium, loss of enjoyment of life)

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no recover for noneconomic losses under no fault act

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Recoverable economic losses

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Medical expenses, incidental benefits (expnses that arise out of course of aparty's medical treatment that reasonably necessary), rehabilitation expenses, funeral expenses, wage loss benefits, replacement services, survivor's loss, expsnes incurred byeond 3 year period

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Medical expenses

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INsurer liable only for such expenses that are customary and reasonable in amoutn charged and for serices that are reasonably necessary to treatment of the injyr

P has burden of proving by preponderance of evidence that the charges are customary and reasonable

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Incidental benefits

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Expenses that arise out of course of meidcal treatmetn (transportation to receive medical treatment, modifications to homes, services provided by family members, food and housing expenses if in an institutional setting)

Must relate to reasonably necessary medical treatment

These benefits are good for only three years following accident

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Funeral expenses

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Minimum of $1750..max of $5000

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Wage loss benefits

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Loss of earnigns from work that the insure dperson would have performed had he not ben injured are recoverable. Recovery limited to salaries and wages (except for self employed individuals who can recover lost profits attributable to personal effrot)

Even abailble to those who are employe dpart time or temporarily unemploye dproviding the claimant cna prove that but for the accident he would have been employed

LIMITED to 85% of insured's total wages and payable for max of 3 years. Claimant has DUTY TO MITIGATE DAMAGES once disability ends.

Wage loss benefits MAY be waived and offset by federal benefits.

Cease upon claimant's death

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Replacement services

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Recoverable for reasonably incurred expenses up to $20 per day for household takss that injured used to do himself but can no longer and vailable for three years from date of accident

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Survivor's loss

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Loss of financial support that the dependents would'e gotten from deceased. Recovrerable for three years from date of accident.

Benefits are not available to dependents of uninsured motorists.

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Expenses BEYOND 3 year period

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Although first party benefits for incidental benefits, surivvors loss, wage loss, replacement services only available for 3 years...additionale xpenses and losses incurred beyond this three year period are damages claimed in THIRD PARTY ACTION if injury threshold requirement is satisfied

Front 30

SOL for first party claims

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One year, but if notice of injury provided or benefit payments have been made within one year after accident, the claim may be field more than one year after the accident as long as it is within one year after the most recent losses or expnese have been incurred

But cant recover benefits for any portion of the loss incurred more than one year before date suit was commenced

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Attorney Fees

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Recoverable if no fault insruer failts to pay no fault benefits or delays paying the benefits - claimant must show hoever that the insruer was unreasonabl e in denying payment

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Third party claims

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Person who is injured due to negligence of another may be able to bring tort action agains thte negligent party's INSURER

Victim may recover from negligent party (i.e. breache dduty of care) if he can show his injuires exceed tort threshold, but can't sue for benefits already received as a first party claimant (i.e. wage loss, medical expsnes) - can sue however to recover expenses that exceed maximum policy coverage (i.e. wage loss beyond three year period allowed by first party claim)

Front 33

Right sue in third party claims

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FO the insured injured party to bring suit against negligent uninsured motorist, threshold must still be met thus giving the benefit of no fault protection to uninsured motorist. P must show uninsured driver was at fault

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Comparative negligence defense

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As in all negligence actions in MI, defense of comparative negligence is avialable and serves to either reduce amount of recovery ro preclude recovery if the P is found to be more than 50% at fault - additionally, failure to wear seat blts reduces recovery by upt 5%

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Recovery btwen insurers (subrogation)

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Insurer's rights to reimbrusemetn and/or subrogation from another insurer is governed by statute. A n insurer responsible for no fault bnefits may seek reimbursement from insured's third party tort recovery in only 3 situations:

1. actions occcurring otu fo state
2. actions against uninsured owner/operators where vehicle required to be insured, or
3. acitons invovlign intentional tort against persons or property

ONe year SOL applies to no fault insurer's subrogation action to recover benefits paid under a no fault policy

Front 36

Rlshp btwn workers comp and no fault

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Where party may recover from both workers comp insurer and no fault insurer, either insurer may be entiteld to SET OFF one benefit from the other

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ER's right to set off

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Where accident occurs while in course of employment, driver an recover both no fault and workers comp but the ER can set off workers comp benefits against no fault benefits

Front 38

No fautl insruer's right to setoff

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Auto insurer entiteld to set off money recived from social security and state owrkers comp by dependents of an accident victim against benefits owed to teh dependents by no fault insurer

Front 39

SOL on negligence actions

Back 39

Generally 3 years - SOL on P's claim runs when party can allege cause of action in complaint showing all four elemetns of negligence action but there are few exceptions:

1. On an UNINSURED MOTORIST CLAIM, SOL can extend up to 6 years under contract provision of statute
2. On a NO FAULT SUBROGATION ACTION, SOL is 6 years
3. Tolling of statue may occur when manifestation of serious injury is delayed but doesnt toll when P has simply miscalculated severity of a known injury

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Geographical issues

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1. MI no fault extends to use or operation of auto in the US, its territories and Canada
2. Rights of MI motroists driving otuside of MI are governed by laws of the other jurisdcition but if both drivers were MI residents, then MI law applies
3. No fault excludes coverage of out of state residents occupying an out of state vehicle unless the car is insured by an insurer who has filed a certifiate of compliance under MI law. If certifcate such filed, rights of nonrisdents driving in MI are those of a resident in MI