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Penalty for Overdue No-Fault Personal Injury Protection (PIP) Benefits

Lawyer Commentary on No-Fault Statute: MCL 500.3142

PIP benefits; payment due; interest penalty

If a no-fault insurance company withholds payment of benefits for more than 30 days after receiving “reasonable proof” of a submitted and incurred claim for no-fault benefits, a penalty interest begins to apply on the amount owed. This interest penalty rate grows at a rate of 1 percent per month until the insurance company pays the overdue and outstanding no-fault benefits to the claimant.

The purpose of penalty interest is to punish an insurance company for not paying no-fault benefits after they have received proof of a claim. It should be noted, however, that penalty interest does not apply when property protection insurance (PPI) benefits are withheld.

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 expert 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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