Who Pays an Injured Person’s No-Fault Insurance Benefits?
Lawyer Commentary on No-Fault Statute: MCL 500.3114
PIP benefits; order of priority
Under most circumstances, there will be No-Fault insurance available to someone who has suffered personal injury in an auto accident in Michigan. This is the order of priority that auto accident victims will follow:
A person injured while he is an occupant of a motor vehicle should first make a claim for Michigan No-Fault benefits with the insurance company where he is listed as a named insured on the policy. If the person injured in an auto accident is not named on a motor vehicle insurance policy, he may claim No-Fault benefits from the insurance company of a spouse or a relative who lives in the same household.
If the injured person does not have a No-Fault insurance policy of his own, and does not have a spouse or resident relative who has insured an automobile, he may still recover No-Fault benefits from the insurance company of either the owner or registrant of the vehicle the victim occupied at the time of his accident.
If the owner and registrant of an auto are both uninsured, the injured individual can still collect Michigan No-Fault benefits from the insurance company of the operator of the auto the victim occupied at the time of the accident.
If none of these individuals are insured, the injured person can still recover Michigan No-Fault benefits. The injured person must file a claim with the Michigan Assigned Claims Facility. The Assigned Claims Facility will assign the person to a participating Michigan No-Fault insurance company. See MCL 500.3171-3176 for more information about the Michigan Assigned Claims Facility.
Summary of No-Fault Insurance Order of Priority
- First priority – No-fault insurer of injured occupant
- Second priority – No-fault insurer of injured occupant’s spouse
- Third priority – No-fault insurer of resident relative of injured occupant
- Fourth-priority – No-fault insurer of owner or registrant of the vehicle occupied at the time of the accident
- Fifth priority – No-fault insurer of the operator of the vehicle occupied at the time of the accident
- Sixth Priority – Michigan Assigned Claims Facility
This order of priority reflects the general rule under Michigan law, but there are some important exceptions under the Michigan No-Fault Act.
Exception: Vehicles in the Business of Transporting Passengers
Generally, a person who is injured while riding in a commercial vehicle will follow the rules of priority listed above when seeking Michigan No-Fault benefits. However, there are some commercial vehicles that change the order of priority. In these situations, the law only requires the insurer of the commercial vehicle to provide no-fault benefits to the injured operator or passenger of a commercial transportation company when there is no other source of benefits.
Commercial vehicles that change the rules of priority after a motor vehicle accident under Michigan law include:
- School buses
- Buses operated by a company that is “certified by the public service commission”
- Buses operated under a government-supported transportation program
- Buses servicing non-profit organizations
- Taxicabs that follow specific insurance requirements under the No-Fault Act
- Buses operated by certain liveries, used only to carry passengers to and from a destination
Exception: Employer Provided Vehicles
Vehicles provided by an employer are another exception that changes the general rules regarding order of priority for Michigan No-Fault benefits. This exception is only in situations where a vehicle is owned and registered by an employer and driven by an employee at the time of a car accident or truck accident. In this case, the employee, along with any spouse or resident relative injured while occupying the employer-owned vehicle, will collect his or her Michigan No-Fault benefits from the insurance company of the vehicle they occupied at the time of the auto accident.
This exception applies even when the employee was not driving the vehicle for her job. For example, even if an employee is driving a car owned by an employer to run personal errands, if an automobile accident occurs, the employee, and the employee’s spouse or resident relatives if also occupants of the vehicle, should first file a claim for No-Fault benefits with the insurance company of the commercial vehicle first.
When a motorcycle and motor vehicle are involved in an accident in Michigan, the rules of priority change:
- First Priority – “The insurer of the owner or registrant of the motor vehicle involved in the accident.”
- Second Priority – “The insurer of the operator of the motor vehicle involved in the accident.”
- Third Priority – “The motor vehicle insurer of the operator of the motorcycle involved in the collision.”
- Fourth Priority – “The motor vehicle insurer of the owner or registrant of the motorcycle involved in the accident.”
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.