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No-Fault Act and Statutes

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

Lawyer Commentary on No-Fault Statute: MCL 500.3142

PIP benefits payable as loss accrues; payment due; overdue benefits; interest penalty

No-Fault personal injury protection or PIP benefits must be paid by a car accident victim’s auto insurance company as the cost of those benefits accrue.

No-Fault PIP benefits are deemed to be “overdue” if the auto insurance company has not paid them “within 30 days after an insurer receives reasonable proof of the fact and of the amount of loss sustained” in connection with the claimed benefits.

If the claimed No-Fault benefits pertain to a victim’s accident-related medical expenses, then the bill for any claimed medical care or treatment must be provided to the auto insurance company within 90 days of the care or treatment having been rendered. Failure to comply with the 90-day deadline gives the auto insurance company an extra 60 days (on top of the original 30 days) to pay before the unpaid No-Fault benefits are deemed “overdue.”

Penalty interest “at the rate of 12% per annum” is applied to “overdue” No-Fault benefits such that the penalty interest 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 PIP benefits after they have received proof of a claim.

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.

We are here to help you.

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