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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 driver of another vehicle involved in the collision. If the injured person recovers money in the form of compensation for personal injury, pain and suffering, and economic loss from the insurance company of the other driver, the no-fault insurer of the injured person may be entitled to reimbursement for no-fault benefits (also called personal injury protection or PIP benefits) under certain very limited circumstances. This right to reimbursement from a tort recovery is called a lien. A no-fault insurance company may exert a lien on a tort recovery in the following situations:

  1. When the auto accident occurs outside of Michigan.
  2. Where the injured person brings a personal injury tort lawsuit against an owner or operator of an uninsured vehicle.
  3. Where the basis of an accident victim’s personal injury lawsuit against another driver is that the driver who caused the accident did so intentionally to cause personal injury or property damage.

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 the amount of the settlement or trial verdict that included duplicate 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.