Michigan No-Fault Assigned Claims Plan
The Auto No-Fault Act establishes an Order of Priority in which a person injured in a motor vehicle accident must follow to obtain no-fault PIP benefits. The Order establishes that injured persons must first turn to their own no-fault provider to PIP benefits, then to the policy of a family member with whom they live, and lastly to the no-fault insurer of the vehicle involved in the collision (applicable to non-occupants of a vehicle such as pedestrians and bicyclists). If auto no-fault coverage is not available to the injured person through any of these sources, and if the injured person is not statutorily disqualified from receiving benefits, then the injured person may be entitled to claim PIP benefits through the Michigan Assigned Claims Plan (ACP). When a claim is submitted to the ACP, it is randomly assigned to one of several automobile insurance companies that participate with the Plan.
There are important legal issues pertaining to the operation of the Assigned Claims Plan, particularly under the 2019 legislation, discussed briefly below:
1. ALTERED PRIORITY RULES – The 2019 legislation has resulted in the alteration of certain priority rules applicable to the Act from those that existed under previous law. In this regard, the following should be noted:
(a) Vehicle occupants not otherwise insured with PIP coverage and who are not Medicare opt-outers or $250K excluders will draw benefits from the ACP, not from the vehicles occupied. [§3114(4)].
(b) Pedestrians or bicyclists not otherwise insured with PIP coverage draw benefits from the ACP, not from the involved vehicle. This appears to be true even if the pedestrian or bicyclist is a Medicare opt-outer or a $250K excluder. [§3115(1)].
(c) Motorcyclists can claim PIP benefits through the ACP when any of the vehicles in the listed order of priorities had no insurance or where the applicable insurance policy was a Medicare opt-out or a $250K exclusionary policy. As previously explained, a motorcyclist may be able to draw benefits from the ACP even when the motorcyclist was a Medicare opt-outer or a $250K excluder. [§3114(6)].
2. THE ASSIGNED CLAIMS PLAN BENEFIT CAP – Under the 2019 legislation, there is a $250,000 cap that applies to all persons claiming PIP benefits through the ACP. It would appear that this cap applies only to allowable expenses payable under §3107(1)(a), and not claims for wage loss benefits payable under §3107(1)(b), or replacement service expenses payable under §3107(1)(c). The only exception to the $250,000 cap is if the injured person claims benefits through the ACP when, pursuant to §3107d or §3109(a)(2), that person is injured during the 30-day window when the injured person experienced a lapse in qualified health insurance or other health and accident coverage. In that limited situation, the ACP cap amount is $2,000,000. [§3172(7)(b)].
3. EXCLUDED CLAIMANTS—MEDICARE OPT-OUTERS OCCUPYING MOTOR VEHICLES—Those persons who are described as Medicare opt-outers, and who are injured while occupying a motor vehicle, are not entitled to claim PIP benefits through the ACP. [§3114(4)]. The only exception is if these persons are injured during the previously mentioned 30-day health coverage lapse window, in which case the ACP will pay benefits up to $2,000,000. [§3172(7)(b)].
4. $250K EXCLUDERS OCCUPYING MOTOR VEHICLES—Those persons who were previously described as $250K excluders and who are injured while occupying a motor vehicle are not entitled to claim PIP benefits through the ACP. [§3114(4)]. The only exception is if these persons are injured during the previously mentioned 30-day health coverage lapse window, in which case the ACP will pay PIP benefits up to $2,000,000. [§3172(7)(b)].
5. NON-OCCUPANT OPT-OUTERS AND EXCLUDERS—What happens to Medicare opt-outers and $250k excluders who are injured as non-occupants of a motor vehicle? These persons will likely be entitled to claim PIP benefits through the ACP up to the $250,000 cap because the exclusionary language contained in the occupant priority provisions, §3114(4), is not contained in the non-occupant priority provisions of §3115(1).
6. NEW ACP CLAIM PROCEDURES—The ACP claim making process will become much more complicated under this legislation in several ways, including, but not limited to, the following:
(a) Claims must be made on a special form provided by the ACP. [§3172(3)].
(b) The claimant must provide “reasonable proof of loss.” The ACP must specify in writing the materials that constitute reasonable proof of loss within 60 days after receipt of an application. There is no limitation on how the ACP can define this requirement. [§3172(3)]. Section 4: What Insurance Company Pays PIP Benefits? 26
(c) Benefits may be suspended if a claimant “fails to cooperate” with the ACP in one or more of the ways specified in the legislation, including failing to submit to an examination under oath. [§3173a(1)].
(d) A person making a claim through the ACP must do so within 1 year from the date of the accident. [§3174].
7. DATE OF EFFECT—The new rules for ACP claimants are effective immediately for any accident occurring after June 11, 2019, except as to those claimants whose ACP eligibility will be affected by the new PIP choice policies that will be sold beginning July 1, 2020.
General Rule of Priority in Payment of PIP Benefits
When a person is injured in a motor vehicle collision in Michigan, that person first turns to their own auto insurance provider to receive PIP benefits. If they do not have their own auto insurance policy, they must then look to a no-fault insurance policy issued to the injured person’s spouse or a relative with whom they live. This general rule applies regardless of whether the injured person was driving or occupying his or her own motor vehicle, is a passenger in another vehicle, is a pedestrian, or is a bicyclist. There are a few exceptions to this general priority rule, but in most cases, this is the order in which an injured person would obtain their PIP no-fault benefits.
Injured Persons Who Do Not Have Auto No-Fault Insurance
Before the 2019 legislative changes to the Michigan auto no-fault system, injured persons who did not have a personal no-fault insurance policy and did not live with a relative who had a no-fault insurance policy, the insurance company responsible to pay benefits was determined based upon whether the injured person was an occupant or a non-occupant of a motor vehicle at the time of the collision. If such a non-covered person sustained injury as an occupant of a motor vehicle, that injured person would obtain no-fault PIP benefits from the owner or operator of the vehicle they occupied. However, if such a non-covered individual sustained injury as a non-occupant of a motor vehicle (i.e. a pedestrian or bicyclist), that injured person would obtain PIP benefits from the “vehicle involved” in the accident. However, under the 2019 legislation, these non-covered injured persons will not draw their benefits directly from the Michigan Assigned Claims Plan, unless they are excluded from receiving benefits from that Plan because of the application of the opt-out rules.
Claiming PIP Benefits Through the Michigan Assigned Claims Plan
Injured persons who determine their only source of obtaining PIP benefits is through the Assigned Claims Plan should submit their claim for benefits to the address below:
Michigan Assigned Claims Plan
P.O. Box 532318
Livonia, MI 48153
(734) 464-8111 (phone)
(734) 744-8552 (fax)