Michigan has been one of several states operating under a no-fault auto insurance model since it was adopted in 1973. Under this system, people injured in a car crash receive compensation for their economic loss, including but not limited to medical expenses, lost wages, household assistance, personal care and prescriptions, regardless of who caused the accident. Additionally, because fault is not at issue for this part of your case, injured individuals receive prompt benefits and therefore have money when they need it the most.
Michigan's Current No-Fault System
According to Michigan's Office of Financial and Insurance Regulation, the current no-fault system covers three essential costs of auto accidents:
• Personal Injury Protection (PIP): Pays all reasonable and necessary medical costs for life as it relates to the accident injuries and covers a percentage of lost wages (for up to three years) a person would have earned had they not been injured. PIP also provides a daily stipend for replacement services, such as household chores, mowing the lawn or shoveling snow, that the person can no longer do for himself or herself. PIP benefits also include Attendant Care benefits. This is paid at an hourly rate for personal care that the injured person needs assistance with, including help with hygiene, bathing and getting dressed.
• Property Protection: Pays up to $1 million for any damage a person's car causes to another's property.
• BI and PD: Bodily injury and property damage liability insurance covers defense costs and any damages you are found liable for in the event you are sued after an accident.
In recent years insurance companies have been lobbying for Michigan to abandon its current no-fault system because it provides for unlimited lifetime medical coverage. The Daily Tribune reports that insurance representatives feel the current system is unaffordable, citing a $1 billion deficit in a fund used to cover costs above PIP maximums and managed by the Michigan Catastrophic Claims Association.
The lobbying has resulted in proposed legislation that would end lifetime medical coverage, and instead, would allow drivers to purchase PIP covering anywhere from $500,000 to $5 million for medical expenses. Any costs beyond an individual's insurance limit would then be passed on to the state or covered under a Medicaid program.
However, the proposed changes have been met with strong opposition. Injuries from auto accidents can be severe and life-threatening, often resulting in enormous medical bills. Without unlimited and lifetime medical coverage available, it is likely many people would not receive the care they require or go bankrupt in the process.
Injured in a Car Crash?
Those injured in a car crash have the right to receive the compensation they deserve. Speak with an experienced no-fault insurance attorney today to protect your rights and learn about the options you might have available.