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Michigan No-Fault Insurer Can be Reimbursed: Liens

Lawyer Commentary on No-Fault Statute: MCL 500.3116

PIP benefits; subtraction of tort recovery; attorney fees; reimbursement; liens

Many times, an individual who is injured in an auto accident will file a lawsuit against the at-fault driver who caused the collision.

If the injured person prevails in his or her lawsuit, he or she may recover money in the form of compensation for personal injury, pain and suffering, and economic loss from the insurance company of the at-fault driver.

Generally, the No-Fault insurer of the injured person is not entitled to reimbursement from the injured person’s tort claim recovery for what it has paid out to the injured person in No-Fault benefits (also called personal injury protection or PIP benefits).

However, under very, very limited circumstances, an auto insurance company may be able to seek reimbursement for what it has paid out in No-Fault benefits.

This right to reimbursement is effectuated through what’s called a “lien” and this right can be exercised only in the following situations:

  1. When reimbursement is sought from “a tort claim arising from an accident that occurred outside” of Michigan.
  2. When reimbursement is sought from “a tort claim brought in this state against the owner or operator of a motor vehicle” that was “uninsured” at the time of the car accident.
  3. When reimbursement is sought from “a tort claim brought in this state based on intentionally caused harm to persons or property.”

No-Fault insurance companies can only seek reimbursement for duplicative PIP benefits that an auto accident victim has received from the negligent driver. If an injured person brings a personal injury tort lawsuit against another driver and receives only non-economic damages (compensation for pain and suffering, disfigurement from scarring and surgery, physical disability, etc.), then the No-Fault insurer is not entitled to reimbursement because none of the compensation received is duplicative.

If however, a personal injury tort lawsuit or settlement includes compensation for PIP benefits that have already been paid by an insurance company, then that insurer can seek recovery of whatever amount of the settlement or trial verdict reflects that duplicative compensation.

No-Fault Lawyers of Michigan Auto Law

The lawyers of Michigan Auto Law have been specializing in automobile No-Fault litigation for more than 50 years. If you have been injured in a car accident, truck accident or motorcycle accident and need help with your No-Fault insurance, please call one of our expert attorneys for a free case evaluation at (800) 777-0028 or fill out our consultation form. There is no fee or obligation.

We are here to help you.

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