- Question 1: What are Michigan no-fault PIP benefits?
- Question 2: Who is eligible for Michigan PIP benefits?
- Question 3: What reimbursement limits are applicable to Michigan PIP benefits?
- Question 4: What insurance company pays Michigan PIP benefits?
- Question 5: What happens if governmental or private insurance benefits are also payable?
- Question 6: What should patients and providers know about processing Michigan no-fault PIP claims?
- Question 7: What liability claims can be made against Michigan at-fault drivers?
- Question 8: What are Michigan uninsured and underinsured motorist claims?
- Question 9: What should Michigan auto accident victims do to protect their rights?
A. Basic Concept
The pivotal statutory section regarding entitlement to no‑fault benefits is §3105(1) of the Act. This section states, “Under personal protection insurance an insurer is liable to pay benefits for accidental bodily injury arising out of the ownership, operation, maintenance, or use of a motor vehicle as a motor vehicle, subject to the provisions of this chapter.”
Section 3105(2) states that PIP benefits “are due under this chapter without regard to fault.” It is this subsection that gives “no‑fault” its name.
Notably, the entitlement language of §3105(1) is very broad and goes beyond the typical scenario of bodily injury sustained in car crashes. In this regard, §3105(1) extends entitlement to PIP benefits to a number of non-collision scenarios, such as injuries arising out of motor vehicle maintenance, loading and unloading property, and occupying a vehicle.
In order for no-fault PIP benefits to be payable, there are a few basic requirements that must be satisfied, including the following: there must be a “motor vehicle” involved in the accident as that term is defined in the Act; there must be some form of bodily or mental injury, which can include an aggravation of a pre-existing condition; the injury giving rise to the claim must be accidental in the sense that it was not caused intentionally by the claimant; there must be a sufficient causal connection between the injury and the use of the motor vehicle which is something more than an incidental connection; and the injury must be closely related to the transportational function of the motor vehicle.
B. Parked Vehicle Situations
The availability of no-fault benefits is narrowed in cases where the injury involves a parked vehicle. This situation is addressed in §3106 of the Act, which provides that a person sustaining accidental bodily injury arising out of a parked vehicle is not entitled to PIP benefits unless the injury falls into one of the three scenarios set forth in §3106(1). The first scenario is where the vehicle was parked in such a way as to cause an unreasonable risk of the injury that occurred. The second scenario is where the injury occurs as a direct result of physical contact with either permanently mounted vehicle equipment while the equipment was being operated or used, or direct physical contact with property that was being lifted onto or lowered from the vehicle in the loading or unloading process. The third scenario is where the person was injured while occupying, entering into, or alighting from the parked vehicle.
The Michigan Supreme Court has also recognized a fourth scenario where benefits are payable if the injured person sustained injury while performing maintenance on a parked vehicle.
It is also important to keep in mind that if a person is injured in an accident involving both a moving motor vehicle and a parked vehicle, the involvement of the moving motor vehicle makes it unnecessary for the injured person to fall into one of the four parked vehicle scenarios described above.
Section 3106(2) of the Act contains an exclusion stating that PIP benefits are not payable if an employee suffered an injury that gives rise to the payment of workers’ compensation benefits and the employee sustained that injury while loading, unloading, or doing mechanical work on a vehicle, or while entering into or alighting from the vehicle. However, this exclusion does not apply if the employee was occupying a motor vehicle or if the injury arose from the use or operation of some other motor vehicle. This exclusion also does not apply if the employee sustains injury while actually driving a vehicle in the course of his or her employment.
C. Statutory Disqualifications
There are several very important statutory disqualifications that are contained in §3113 of the Act which, if applicable, will result in the injured person being totally ineligible for no‑fault PIP benefits. For example, a claimant will be disqualified if the claimant was an owner or registrant of a motor vehicle that was involved in the accident which gives rise to the claimant’s injury. In addition, a person will be disqualified if he or she was willingly operating or willingly using a motor vehicle or motorcycle that was taken unlawfully and the person knew or should have known that the vehicle was taken unlawfully; a person will be disqualified if he or she was the owner or registrant of a motor vehicle involved in the accident that was not insured as required by the no‑fault law; and a person will be disqualified if he or she was operating a motor vehicle or motorcycle as to which he or she was named as an excluded operator. The courts have also held that a person can be disqualified from no-fault PIP benefits if that person was guilty of an act of fraud in the procurement of the no-fault policy. In addition, the courts have held that a person could be disqualified from no-fault PIP benefits if the person commits an act of fraud in the processing of a claim for PIP benefits. These fraud disqualification concepts are very important and have been strictly enforced by the courts in recent years.
D. Out-of-State Residents
Before the legislative changes enacted in 2019, out-of-state residents who were injured in motor vehicle accidents occurring in Michigan were entitled to full Michigan no‑fault PIP benefits if the out-of-state resident was insured by an insurance company authorized to do business in the state of Michigan (a so‑called “§3163 insurer”). In addition, before the 2019 legislation, out-of-state residents were entitled to full Michigan no‑fault PIP benefits if they sustained injury while occupying a vehicle insured with a Michigan no‑fault policy.
The 2019 legislation dramatically reduced the availability of no‑fault PIP benefits to out‑of‑state residents. Specifically, §3113(c) states that out-of-state residents are no longer entitled to no-fault PIP benefits, unless the out-of-state resident is an owner of a vehicle that is both registered and insured in Michigan, regardless of whether the out‑of‑state resident was insured under an out-of-state policy issued by an insurance company authorized to sell insurance in Michigan (i.e., a §3163 insurer). This new exclusion creates very serious problems for out-of-state residents who are injured in Michigan or while occupying Michigan insured vehicles. Although no-fault PIP benefits would still be available to an out-of-state resident who is the owner of a vehicle that is both registered and insured in Michigan, it could be that family members of such an owner may not be entitled to PIP benefits because they are not “the owner” of that vehicle. This would be a very unfair interpretation of the law that would deny PIP benefits to entire families, even though there is a vehicle in the family household that is registered and insured with no-fault insurance in the State of Michigan.
Recognizing the harshness of this out-of-state resident exclusion, the 2019 legislation gives out-of-staters who are excluded from PIP benefits the right to sue the at‑fault driver in a tort claim for medical expenses and other losses that were not compensated. Such tort claims will be further discussed in Section 6.
E. Out-of-State Accidents
Section 3111 of the Act provides that PIP benefits will be payable in certain situations where the insured person is involved in an out-of-state accident. This section states that PIP benefits “are payable for accidental bodily injury suffered in an accident occurring out of this state, if the accident occurs within the United States, its territories and possessions, or in Canada.” However, the injured person must show one of two things: (1) the injured person is a named insured under a Michigan no‑fault policy or is the spouse or resident-relative of a person who is named insured under a no-fault policy; or (2) the injured person must show that he or she was an occupant of a vehicle whose owner or registrant insured that particular vehicle under a Michigan no-fault policy.
F. Motorcycles and the No-Fault Law
Motorcyclists are not required to buy mandatory auto no-fault insurance. However, motorcyclists sustaining injury in accidents involving motor vehicles are entitled to payment of full no-fault PIP benefits. Therefore, motorcycle accidents create a separate and distinct class of claimants who are subject to certain special rules which are briefly discussed below:
- ENTITLEMENT TO NO-FAULT PIP BENEFITS — In light of the fact that a motorcycle is not defined as a “motor vehicle” under the Michigan No-Fault Act, a motorcycle is not entitled to no‑fault PIP benefits if the injury involves only a motorcycle. However, if the motorcyclist is injured in an accident involving another motor vehicle (i.e., a car or a truck), the motorcyclist will be entitled to no-fault PIP benefits. In this situation, the motorcyclist is not required to show that there was actually physical contact between the motorcycle and the motor vehicle. Rather, the motorcycle injury must, in some way, “arise out of” the operation of the motor vehicle. Therefore, if the motor vehicle causes the motorcycle to lose control, or in some other way precipitates the collision with another object, a sufficient causal connection between the motorcycle and the operation of the motor vehicle will exist, thereby entitling the motorcyclist to PIP benefits.
- MOTORCYCLE DISQUALIFICATION — Section 3113 of the Act contains two important disqualifications that are applicable to motorcycle owners. First, a motorcycle owner who has not purchased traditional liability coverage for his or her motorcycle (commonly referred to as PLPD coverage) is not eligible to recover PIP benefits in a motorcycle/motor vehicle accident. However, this disqualification extends only to the owner or registrant of the motorcycle and does not apply to a non-owner passenger on board an uninsured motorcycle. Second, a motorcyclist who operates a motorcycle as to which he or she was identified as an excluded operator is not eligible to recover no-fault PIP benefits in a motorcycle/motor vehicle accident.
- IDENTIFYING THE INSURER RESPONSIBLE TO PAY PIP BENEFITS IN MOTORCYCLE CLAIMS — The No-Fault Act contains special “priority rules” that are applicable to motorcycle accidents and that identify the insurance company that bears legal responsibility for paying the claim. These priority rules are set forth in §3114(5) of the Act and basically state that an operator or a passenger of a motorcycle who sustains injury arising out of an accident involving a motor vehicle, must claim no-fault PIP benefits from insurers in the following order of priority: the insurer of the owner or registrant of the motor vehicle involved in the accident; the insurer of the operator of the motor vehicle involved in the accident; the auto no-fault insurer of the operator of the motorcycle involved in the accident; and the auto no-fault insurer of the owner or registrant of the motorcycle involved in the accident. A person who is injured while an operator or passenger of a motorcycle who is unable to recover benefits under any of the above‑referenced levels of priority will draw benefits through the Assigned Claims Plan, which is discussed in connection with Section 4.
- MOTORCYCLE ACCIDENTS OCCURRING IN OTHER STATES — The No‑Fault Act also provides that a Michigan resident who sustains injury operating or riding a motorcycle in another state can recover no‑fault PIP benefits, as long as the motorcyclist was, at the time of the accident, a named insured under a Michigan auto no-fault insurance policy or was the spouse or resident-relative of someone who was insured under a Michigan auto no-fault insurance policy. In that situation, the Michigan motorcyclist would recover no-fault PIP benefits directly from the motorcyclist’s auto no-fault insurer. Presumably, in order to recover PIP benefits in an out‑of‑state accident, it would be necessary to show that the injury arises out of a “motor vehicle accident,” as opposed to an accident solely involving motorcycles. However, that point has not been specifically addressed by Michigan appellate courts and the issue is not absolutely clear. This is because the out-of-state accident provisions of §3111 of the No-Fault Act speak only about “accidental bodily injury suffered in an accident occurring out of this state.” This section does not refer to a “motor vehicle accident.” However, it is unlikely that a motorcyclist could recover PIP benefits if they are injured in an accident occurring outside of Michigan that did not involve a motor vehicle in some way.
G. Other Non-Vehicular Occupants (Bicyclists and Pedestrians)
Frequently, persons sustain bodily injury in accidents involving motor vehicles while they are not occupying a motor vehicle. Motorcyclists are in that category and their claims are discussed above. However, pedestrians and bicyclists also fall into this category. As with motorcycles, if a pedestrian or a bicyclist is injured as a result of the operation of a motor vehicle, the pedestrian or bicyclist is entitled to full no-fault PIP benefits. The issue of which insurer has the legal obligation to pay those PIP benefits is discussed in greater detail in connection with Section 4. However, the general rule is that the pedestrian or bicyclist will recover no‑fault PIP benefits directly from their own auto insurer, or from the auto insurer of a resident‑relative. If the pedestrian or bicyclist does not have their own auto no‑fault insurance policy, or does not reside with a resident-relative who has a no‑fault insurance policy, then the issue of who pays no‑fault PIP benefits will depend on whether the claim is controlled by prior law or the 2019 legislative amendments. Under the prior no-fault law, benefits would be payable to such claimants pursuant to the following rules: persons injured while occupying a motor vehicle would draw PIP benefits from the insurer of the vehicle occupied; and persons injured while not occupying a motor vehicle would draw PIP benefits from the insurer of the motor vehicle that was involved in causing the claimant’s injury Under the old law, if there was no PIP coverage available under those rules the claimant would draw PIP benefits from the Assigned Claims Plan (ACP). As will be more fully discussed in Section 4, under the 2019 legislative amendments, claimants such as pedestrians and bicyclists who do not have their own no‑fault insurance policy or are not domiciled with a relative who has a no‑fault insurance policy, will have benefits paid by the ACP, subject to the monetary cap applicable to the plan.