Michigan No-Fault Insurance Lawsuit FAQs

A Michigan No-Fault insurance lawsuit allows a car accident victim to sue for compensation, benefits, and money damages. There are two distinct paths, depending on who you’re suing:

• First party lawsuit – You file a lawsuit against your own insurance company to recover unpaid or wrongfully denied Michigan No-Fault (PIP) benefits under MCL 500.3105, including medical bills, wage loss (up to 85% of income, capped at 3 years, under MCL 500.3107), attendant care, and replacement services.
• Third party lawsuit – You sue the at-fault driver’s insurance company for pain and suffering and any economic losses that exceed your No-Fault benefits, subject to the injury threshold in MCL 500.3135.
• Mini tort claim – If you’re 50% or less at fault, you can recover up to $3,000 from the at-fault driver’s insurer for vehicle damage not covered by your own policy, under MCL 500.3135(3)(e) and (4)(a).

What Is The Serious Impairment Threshold For A Pain And Suffering Lawsuit?

To sue the at-fault driver for pain and suffering, Michigan law requires that your injury meet the “serious impairment of body function” threshold, or that it resulted in permanent serious disfigurement or death. This threshold is defined under MCL 500.3135, which states that a person has suffered a serious impairment of body function when their injuries affect their “general ability” to live their normal life or otherwise have influenced a person’s capacity to live in their normal manner of living.

Without meeting this threshold, an accident victim generally cannot recover pain and suffering damages from the at-fault driver, even if that driver was clearly negligent.

In Michigan, you generally have one year to file a No-Fault insurance lawsuit for PIP benefits and three years to file a lawsuit against the at-fault driver’s insurer for pain and suffering damages.

• One-Year-Back Rule: You have one year from the date of the accident (or from when a benefit became overdue) to file a No-Fault lawsuit against your own insurance company for PIP benefits (MCL 500.3145).
• Three-Year Statute of Limitations: You have three years from the date of the accident to file a third-party lawsuit against the at-fault driver’s insurance company for pain and suffering damages (MCL 600.5805(2)).

If you do not file within these deadlines, it is very difficult to recover from your car accident. There are other important filing deadlines that, if missed, can devastate an auto accident victim’s rights and recovery. This is why it’s beneficial to speak with an auto lawyer about your circumstances.

Our auto lawyers would like to reassure you that there’s no legal risk in filing a Michigan No-Fault insurance lawsuit or hiring an auto accident lawyer. If you have very serious injuries from a car accident that have dramatically impacted your life and your body function, then it’s possible that you will have a viable case and be able to collect Michigan No-Fault benefits and pain and suffering damages. That being said, every person, car accident and personal injury is different. There’s no cookie-cutter answer as to how much you will be able to recover.

There is also no financial risk in filing a Michigan No-Fault insurance lawsuit. That’s because with car accident personal injury cases, the client pays absolutely no money to the auto accident lawyers unless the lawyer wins the case. This is called a contingency fee system, and most car accident personal injury lawyers throughout the state are paid on a contingency fee basis.

People who file auto accident and Michigan No-Fault insurance lawsuits are not bad people. Our clients are very good, hardworking people. But when you’re in a serious car crash at the hands of a negligent driver, and your injuries are so severe that it becomes difficult to keep food on the table and to provide for your family, many people have to file auto accident lawsuits.

One thing many people don’t realize is that Michigan’s No-Fault Law allows auto accident victims to recover No-Fault benefits, including payment of medical bills and mileage, wage loss, attendant care (nursing services) and replacement services (help around the house). The state of Michigan has instituted this system to protect auto accident victims. But very often, auto insurance companies do not have the auto accident victims’ best interests in mind, and they will cut off these vital Michigan No-Fault benefits with no explanation. This is one reason that many people contact our auto lawyers, to simply fight for the insurance benefits they’re entitled to under Michigan law.

It’s also possible to sue the wrongdoer driver’s insurance company for your pain and suffering. But remember, you are not suing an individual person. You are suing that person’s auto insurance company. So by filing this type of lawsuit for your car accident personal injuries, you will not be harming or bankrupting the other driver involved in the crash.

What Happens If My Insurance Company Wrongfully Denies My Claim?

If your No-Fault insurance company unreasonably delays or denies your benefits and you’re forced to file a lawsuit, Michigan law allows the court to impose a 12% annual penalty interest on the overdue amount under MCL 500.3142, and may require the insurer to pay your attorney fees under MCL 500.3148 if the refusal is found to be unreasonable.

There are usually three types of lawsuits:

1. First-party: A first-party lawsuit is between the auto accident victim and his insurance company for Michigan No-Fault benefits, also called personal injury protection (PIP) benefits. In a first-party case, Michigan No-Fault insurance benefits are usually paid out by your own insurance company.
2. Third party: A third party lawsuit is between the auto accident victim and the driver who caused the auto accident. In a third party case, the auto accident victim sues the at-fault driver for pain and suffering, and excess economic damages. Damages are usually paid out from the wrongdoer’s insurance company.
3. Mini tort: A car accident victim can recover a maximum of $3,000 for vehicle damage from the driver who caused the crash, via his or her auto insurance company. This is called a mini tort claim. Michigan’s mini tort law is not designed to pay for all of your vehicle damage. The purpose is to compensate a person involved in a car accident that was not at-fault, for out-of-pocket expenses resulting from the collision.

Did Michigan’s 2019 No-Fault insurance Reforms Change How These Lawsuits Work?

Yes. Michigan’s 2019 No-Fault reforms allow drivers to choose different levels of PIP medical coverage, ranging from $50,000 up to unlimited lifetime benefits, or opting out entirely under certain Medicare/Medicaid conditions, instead of the previously required unlimited coverage. These changes have led to ongoing litigation over fee schedules, attendant care limits, and whether reduced coverage applies retroactively to people injured before 2019.

What Was the Andary v. USAA Michigan Supreme Court Decision?

The Andary v. USAA Michigan Supreme Court ruling held that the 2019 No-Fault fee schedule and attendant care limitations do not apply retroactively to accident victims who were injured while covered by a policy issued before June 11, 2019. The Court found that these accident victims had a vested contractual right to the level of PIP benefits that existed under their policy at the time of injury, and that the Legislature never clearly stated an intent to strip away those rights when it passed the 2019 amendments to MCL 500.3157.

In practice, this means if you were catastrophically injured before June 11, 2019, your medical fee reimbursement and in-home attendant care benefits are still governed by the law as it existed on the date of your accident, not the reduced fee schedule or family-provided attendant care limits added in 2019.

If you are injured in a car accident in Michigan and have questions about a Michigan No-Fault insurance lawsuit, call now (800) 968-1001for a free consultation with one of our experienced No-Fault Lawyers. There is no cost or obligation. You can also visit our contact page or use the chat feature on our website.

Michigan Auto Law is Michigan’s largest and most successful law firm that specializes exclusively in helping people who have been injured in auto accidents.

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Unlike other law firms, our attorneys are never too busy to promptly return phone calls and answer questions. 

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More importantly, this client-focused approach leads to better and faster settlements for our clients. Michigan Auto Law has recovered more million-dollar settlements and trial verdicts for motor vehicle accidents than any other lawyer or law firm in Michigan. We’ve also recovered the highest ever reported truck accident and car accident settlement in the state.

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