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Non-Economic Damages Under the No-Fault Insurance Law

Lawyer Commentary on No-Fault Statute: MCL 500.3135

Tort liability for noneconomic loss; cause of action for damages; “serious impairment of body function” defined; mini tort

The most important and most frequently litigated No-Fault statute, this law defines the injury threshold that car accident victims must meet in order to bring a lawsuit under Michigan law, and what types of compensation can be asked for as a result of a car accident.

Michigan is a No-Fault state, so there are significant limitations on what types of damages and compensation a person who has caused a car accident (the wrongdoer or negligent driver) can be sued for. For instance, a person who has been seriously injured in a car or truck accident is entitled to recover damages from the at-fault driver only for his or her pain and suffering and for “excess” economic loss (such as medical expenses, No-Fault wage loss and survivor’s loss). Notably, in 2012, the Michigan Supreme Court ruled that car accident victims could not sue for “excess” replacement services.

This law also defines how seriously an injured person must be hurt from a car accident to be able to hire a lawyer and bring a lawsuit for personal injury. The lawsuit following a car accident is often referred to as a third-party auto negligence lawsuit or a tort lawsuit by Michigan lawyers. However, these lawsuits can only be filed if the injuries suffered from a car accident are deemed sufficiently serious, and in Michigan, there is a law that defines how serious these injuries must be before a lawyer can be hired and a lawsuit can be filed.

Michigan’s Car Accident Law

In 1995, the Michigan Legislature defined how hurt a person injured in a car accident must be in order to be able to recover money damages for his or her pain and suffering. In its 2004 ruling in Kreiner v. Fischer, the Michigan Supreme Court misinterpreted this standard, resulting in thousands of car accident victims being wrongfully denied justice. In 2010 in McCormick v. Carrier, the justices overruled Kreiner. Finally, in 2019, the Michigan Legislature amended the car accident law to codify the Court’s ruling in McCormick.

The car accident law set forth in the No-Fault Act is referred to as Michigan’s tort threshold law. It is a test that an injured person must pass to be able to show that he or she has suffered a “serious impairment of body function.” This tort threshold only applies to people injured in car accidents. Michigan’s auto accident threshold law requires that someone injured in a car accident must first suffer a “serious impairment of body function” to be able to sue for personal injuries from a car accident.

Tort Threshold – Serious Impairment of Body Function

The “tort threshold” is crossed when someone who has been injured in an auto accident is able to demonstrate a “serious impairment of body function” due to injuries he or she has received from the crash. The statutory definition of “serious impairment of body function” as stated in MCL 500.3135(5) can be easier to understand when thought of as three separate tests instead of just one threshold test, as it requires that three separate and distinct elements be met:

  • An impairment must be “objectively manifested,” “meaning it is observable or perceivable from actual symptoms or conditions by someone other than the injured person.” (MCL 500.3135(5)(a))
  • The objectively manifested impairment must be to an “important body function,” “which is a body function of great value, significance, or consequence to the injured person.” (MCL 500.3135(5)(b))
  • The objectively manifested impairment of an important body function must affect “the injured person’s general ability to lead his or her normal life, meaning it has had an influence on some of the person’s capacity to live in his or her normal manner of living. Although temporal considerations may be relevant, there is no temporal requirement for how long an impairment must last. This examination is inherently fact and circumstance specific to each injured person, must be conducted on a case-by-case basis, and requires comparison of the injured person’s life before and after the incident.” (MCL 500.3135(5)(c))

Most personal injury cases are decided on the basis of the third prong of Michigan’s “serious impairment” test. Strategies and tactics to meet this third prong are extensively discussed in the Michigan Lawyers section of this web site. See 13 Ways to Prove Serious Impairment and 10 Lessons for Michigan Auto Accident Attorneys.

Caveat to the “Serious Impairment” Requirement

Generally, if there “is no factual dispute concerning the nature and extent of the person’s injuries,” a judge may decide for him- or herself whether a car accident victim has met the “serious impairment of body function” threshold. In other words, under those circumstances, the judge does not have to let the victim present his or her case to a jury.

However, the judge’s power to prevent a case from going to a jury does not apply when a car accident victim has suffered a “closed-head injury,” such that he or she may have “a serious neurological injury.”

Significantly, there are other caveats to filing a third-party auto negligence lawsuit:

  • A lawsuit cannot be filed if at the time of a car accident the injured person did not meet the insurance requirements of MCL 500.3101. In other words, a car accident victim who was “uninsured” at the time of a car crash is prohibited from filing a lawsuit for pain and suffering damages. This is true regardless of how catastrophic or severe his or her injuries are and/or how negligent the driver was who caused those injuries.
  • Similarly, pain and suffering “[d]amages must be assessed on the basis of comparative fault, except that damages must not be assessed in favor of a party who is more than 50% at fault.”

Michigan Mini Tort

Michigan law also provides owners of damaged vehicles the right to receive up to $1,000 under what is called a “mini tort” for damage to a car or truck from a car accident, if it is not covered by the driver’s auto insurance. (NOTE: The maximum mini tort recovery amount will increase from $1,000 to $3,000 for car accidents occurring after July 1, 2020.)

Importantly, there are limitations to recovery under the mini tort:

  • If the person claiming the mini tort is determined to be “more than 50% at fault” in causing the car accident, the right to bring a mini tort claim is lost.
  • A driver who was “uninsured” at the time of a car accident is prohibited from making mini tort claim.

Keep in mind, there is no mini tort for motorcycle damage under Michigan law.

No-Fault Insurance Lawyers of Michigan Auto Law

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

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