MI No-Fault Law in Danger: What You Need to Know
March 29, 2018
Michigan legislature is once again introducing a number of bills (HB 5517-5523) seeking to change or even eliminate Michigan no-fault law. How do lawmakers want to change Michigan no-fault law? How can this new proposed change affect you? Below are answers to some of the most common questions the team at Whiting Law is hearing about these proposed changes to the Michigan no-fault law:
What is Michigan No-Fault Law?
Under current Michigan no-fault law, if you are involved a motor vehicle accident, whether or not you are at fault, you file a no-fault claim with your own carrier and are entitled to these benefits:
- Unlimited lifetime medical expenses paid
- Up to three years of wage loss benefits
- Up to three years of household services benefits
Additional claims related to issues such as pain and suffering are filed against the other driver’s insurance carrier.
The original intent of Michigan no-fault law was to help victims of auto accident injuries receive prompt payment for their accident-related injuries without having to prove fault.
How Do Lawmakers Want to Change Michigan No-Fault Law?
While this is not the first time insurance companies and their lobbyists and supporters in government have tried to reform Michigan no-fault law, this is the first time a proposal to eliminate it entirely has been introduced.
The proposed bill would:
- Get rid of the no-fault system or at least set lower limits ($10K-20K) for medical benefits
- Make lifetime medical coverage optional for people catastrophically injured in an auto accident
- Give drivers the ability to sue other people involved in a crash
How Could the New Michigan No-Fault Law Affect Me?
People injured after January 1, 2020 would have to pursue other legal rights (such as the at-fault driver’s liability insurance) to get their medical expenses paid, but exactly what those rights are has not been clearly defined in the proposed bill’s language. In addition, legislators have not proposed a change to the fact that drivers are currently only required to carry $20,000 of liability insurance. That means if you were gravely injured in a car crash, you may only get $20,000 for your medical expenses.
Even minor injuries can lead to huge medical bills. Under this proposed new law, your no-fault benefits could be entirely used up before you are even released from the hospital. You would have no assistance for lost wages or in-home care.
Simply put, a person who is injured (even minorly) in an auto accident could, through no fault of their own, face bankruptcy because of someone else’s negligence.
What Else Do I Need to Know About Proposed Michigan No-Fault Law Changes?
Michigan currently has the highest auto insurance rates in the country, which is why this issue continues to come up with lawmakers. No one can agree on reform. Is the system perfect? No, but Michigan no-fault law is the best system in the country for taking care of the victim.
The repeal of Michigan’s no-fault law could also mean that insurance carriers could potentially collect from $21 billion in surplus funds created by 40 years of Michigan drivers paying Michigan Catastrophic Claims Association fees.
This is a law proposed to benefit insurance carriers, not accident victims.
If you have been injured in a vehicle-related accident, you need an experienced auto accident attorney to help you navigate the complicated insurance claims process so you can focus on your recovery. Contact Whiting Law today for a no-obligation consultation.