In Michigan, when we talk about auto insurance and auto accidents we hear the same familiar phrases: “Michigan is a no fault state”, “first-party benefits”, “third-party case”. But while everyone seems to know that Michigan is a “no fault” state, do we really know what that means?Prior to devoting my entire life and career to the law, I didn’t. So I’m guessing that many of you don’t either. In today’s blog post, I’m going to try to demystify and lay out just what “no fault” means for you. After all, in Michigan we all pay the highest auto insurance rates in America. We should know what we’re buying when we write that check to the insurance company every month.Once upon a time, a long long time ago in Michigan, we didn’t have “no fault”. If you were in a serious car accident, even one so serious that you died or you were unable to work or you lost a limb and became disfigured or paralyzed, your only option was to sue the driver of the car that hit you. If you wanted to be compensated for your loss you had to go after the driver who was at fault for the accident. One of the big problems with this system was in almost every accident, there’s someone who’s at fault (the person who ran the red light or was drinking and driving) and there’s someone who’s not. So if you were at fault for the accident and you screwed up, which frankly happens a lot, your whole life could be ruined. The system led to a lot of lawsuits and litigation.So a long time ago the insurance companies, the legislature, and all the attorneys got together and instituted in Michigan a revolutionary idea: no fault auto insurance. Under no fault, it doesn’t matter who’s at fault for the accident. It doesn’t matter if you were drinking and driving. It doesn’t matter if you ran the red light or were speeding. It doesn’t matter if both drivers are pointing the finger at the other driver blaming them for what happened. Under no fault, every person would purchase auto insurance that made sure that they would be protected and be given certain limited benefits if they were in an automobile accident and hurt. Think of it as Obamacare for auto accidents.But nothing’s for free. So as part of this grand bargain, the attorneys and the legislature and everyone else agreed that since everyone was going to be covered regardless of fault, drivers had to give up certain rights to make claims that they were traditionally allowed. So let’s talk about just what no fault means for you.As I stated, under no fault, if you are in an automobile accident you’re entitled to certain benefits regardless of who’s at fault for the accident. Even if you are the driver who is at fault, you are still entitled to benefits. And sometimes, even if you don’t have your own auto insurance you can get benefits (e.g., you’re a passenger). As long as your injuries came from the accident you are generally entitled to the following benefits:
- Medical Bills
You are entitled to all your medical bills incurred as a result of the accident, to be paid by your insurance company. Let me repeat that. Every single medical bill that you incur as a result of the accident your insurance company has to pay. You need physical therapy? No problem. Your insurance company has to pay for it. Do you need a nurse to come in and take care of you for a while? No problem. Do you have to have invasive back surgery that costs $50,000.00? No problem. As long as it was due to the accident, your insurance company is obligated to pay for it under no fault auto insurance.Keep in mind that it doesn’t matter if you have your own healthcare insurance to be entitled to these benefits. I’ve represented pedestrians and even homeless people who have been hit by a car, who have no insurance and no way to get medical care, and they are entitled to have all their medical bills paid under the No Fault Act.Perhaps even more important, your entitlement for medical benefits is for life. That means if you’re in an automobile accident today and let’s say you rupture a disc in your back. But you’re able to live with it for five years and it doesn’t get worse. But after five years that disc degenerates to the point where you need to have back surgery. It’s still covered. As long as you can trace the medical bill to the auto accident, the insurance company has to pay for it.
- Nursing Care
You’re also entitled to nursing care, under the No Fault Act. This is commonly referred to in legal parlance as “attendant care.” It doesn’t need to be performed by a nurse. But if you need help with traditional caretaker functions, such as bathing, taking you to the doctor, administering medications or caring for your wounds, or other caretaker functions, the insurance company is obligated to pay your caretaker an hourly rate. You can have an outside professional agency perform these duties and be reimbursed by your insurance company. Or, under the law you can actually have a family member perform these duties.So let me give you another example. I represented a gentleman who was in a serious car accident which displaced the vertebrae in his back. This guy was in a lot of pain and he couldn’t work and could hardly perform his jobs. He needed someone to take care of him at least eight hours a day. This means he needed someone to help him get up and get back on the bed, remain in the general proximity to care for him, and to help him use the bathroom. He didn’t want a stranger coming into his house and doing all these invasive things. So he had his wife, who was not trained in nursing or had any medical experience, perform these services for him. His wife was entitled to be paid at an hourly rate for caretaker services by the insurance company under no fault insurance.
- Lost Wages
If you can’t work, you’re still entitled to a paycheck for your lost money due to not being able to work. The insurance company is obligated to pay you 85 percent of what you would have made had you not been in the automobile accident.Let’s say that you make $1,000.00 a week at your job. You’re involved in an automobile accident and you have to take a month off of work to get better. You lose $4,000.00. Under no fault, your insurance company has to give you a check for 85 percent of the money that you lost ($3,400.00).Things can get a little tricky if you own your own business or you have variable income such as bonuses, commissions, etc.. An attorney can assist you in ensuring that you get all the money that you’re entitled to under your insurance.
- Household Chores
A big thing for people that are injured in an automobile accident is that they can’t do some of the stuff around the house that they used to. Who’s going to mow the lawn? Who’s going to take out the trash? Who’s going to clean? A lot of these activities involve bending, twisting and being able to be physically active and to be able to do them.Don’t worry. Under the No Fault Act, you’re entitled to $20.00 a day to pay for someone to come and do household chores that you can’t do because you’re hurt. Just like nursing services, this can be a family member or friend, it does not need to be a professional company.
You’re also entitled to mileage reimbursement for traveling to and from doctors’ appointments and other necessary appointments related to the accident. So if you have to travel 75 miles to go see your specialist, your insurance company will reimburse you for that mileage.
- Other Benefits
There are also other benefits you may be entitled to, such as modifying your home or car for your injury. Check with an attorney to see just what you are entitled to.I’ve laid out the basic benefits of no fault above. So what are you giving up? All these benefits don’t come for free. The insurance company wouldn’t agree to that. As a result of no fault and the benefits that it gives, people who are in car accidents give up certain rights. Among them, is the ability to claim and collect for pain and suffering, and for certain other benefits. Some of the benefits that I have listed above, such as household cleaning and work loss, are limited and only last a certain amount of time.As with anything else in the law, there’s always exceptions and there’s always special circumstances. For your specific situation, you must contact an attorney who can advise you on what benefits you’re entitled to and what you need to do to get them. I can’t tell you how many people I’ve seen who have come into my office who have been in a serious accident and who have lost thousands upon thousands of dollars in benefits that they were entitled to under their own insurance policy because they had no idea what they were doing.You can’t rely on the advice of your own insurance company when you get into an auto accident. Oftentimes, the insurance company will give you the least benefits that they can get away with.Go and see an attorney as soon as you can. Another reason that it’s imperative that you see an attorney as soon as possible after an auto accident, is that the insurance company will often fight you on certain benefits, deny you benefits, or after a certain amount of time arbitrarily just cut your benefits off. I recently had a woman come into my office who is a speech therapist in the medical field and who was involved in a serious car accident. The car accident caused her serious brain injury and she could no longer work. She has been undergoing weekly medical rehabilitation services to try to get her back to normal. At first, the insurance company paid her benefits. But after eight months, without warning, the insurance company cut off her benefits and has refused to pay her medical bills or her lost wages. As a result this poor woman is unable to get the medical care she needs to get better, and she is losing her house and her ability to survive. She’s in jeopardy of being out on the street. I’m currently in the process of helping this woman, but it would have been a lot easier had she come to me from day one. I might have been able to prevent her benefits from getting shut off in the first place.I hope that this week’s blog post has helped shed some light on the no fault system in Michigan so the next time that you or someone you know is involved in an auto accident you will know your rights. Or at the very least, the next time someone starts mouthing off about Michigan no fault, you’ll be able to know what you’re talking about. Michigan’s no fault system can be very complicated and confusing. I have personally helped thousands of people get the benefits that they’re entitled to and put their lives back together after an auto accident. Feel free to contact me for a free consultation.Next week, I’m going to cover what’s known as “third party” auto cases. This is where you actually sue the driver or person responsible for the automobile accident. So instead of getting benefits from your own insurance company as in no fault, in a third-party case you’re actually suing someone and going after them and their insurance company. Confused? Don’t be. All will be revealed next week. Thanks for reading and have a wonderful weekend.