Presented by: Jeffrey Bussell and Michael Shaffer
Description: This podcast covers how to get some of the cost of your car damage reimbursed under the Michigan Mini Tort Law, recent changes to the law and loopholes you need to know.
Length: 16 minutes, 44 seconds
Jeff: My name is Jeffrey Bussell. I am a pre-lawsuit attorney at Michigan Auto Law. We handle serious truck and auto accidents. That’s primarily what we do.
Mike: My name is Mike Shaffer. I also work in the pre-lawsuit division at Michigan Auto Law. We spend a lot of time answering questions for people about their insurance coverages and various issues related to auto accidents.
Jeff: One of the most frequent topics of conversation that we deal with on a regular basis is the mini tort case, which is essentially the amount of property damage you’re allowed to get from the wrongdoer, or the tortfeasor as we say in legal language. Most people understand wrongdoer. (For more information, read our mini tort FAQs.)
In Michigan, when the No-Fault Act was passed, back in 1972 but it took effect in 1973, there was originally no provision for property damage. If a person wasn’t insured, they were completely immune from any property damage. Years later, that amount was changed to $400. And I believe in 1995 it was increased to $500, which meant that basically if you were in an auto accident and someone damaged your car, you were responsible for your own collision coverage. But the other person was responsible for a maximum of whatever that mini tort amount was, which currently is $500. But it will change in October to $1,000. Rick Snyder on June 7 (2012) signed House Bill 5362 into law, which is now going to increase the mini tort limit to $1,000.
Mike: So the practical effect of this is that basically, if you’re in an auto accident where the other driver is at fault for causing the accident, the maximum you can recover at this moment for your vehicle damage from the at-fault party is $500, which Jeff eluded to will change to $1,000 in October of 2012.
This is a question we get every single day. And the most common type of mini tort question we get is when the person was not at fault and only carried plpd coverage on their vehicle. They don’t have collision coverage, where their own insurance will not pay for their vehicle damage. In that situation, I have to give the unfortunate news to them that they can only, at least at this moment, recover $500, as we eluded to will change to $1,000. And that causes people to be incredulous, because they may have a car that’s worth $2,000, $3,000, $4,000 that gets totaled in the accident, and all they can recover is $500. And as Jeff knows, that just causes people a lot of angst.
Jeff: One time I had somebody who instead of actually having a collision with the vehicle, a semi truck had some equipment on it and hit the top of an overpass. And the client’s car was actually hit by debris. Instead of paying under the collision policy with the client’s insurance, they paid under comprehensive, and there was a $100 deductible instead of a $500 deductible. And as far as I was concerned, it was a $100 mini tort claim.
We should also talk about this: $500 (it’s going to be $1,000 as of Oct. 2012) is a maximum. It’s not the set amount. If you only have off $200 worth of damage, you’re going to get $200. It’s a minimum. If you have a deductible that’s only $250, you’re only going to get $250. If you have something called broad collision, which basically means if you’re less than 50% at fault your insured will waive your deductible, then you don’t have a mini tort case. Unless the other driver is uninsured, then you have some supplemental damages. Generally the insurance company will pay it, but sometimes they don’t. Your forced to sue and you have to file in small claims court, and there’s costs associated with it. I’m not sure exactly the costs, but generally it’s under $100.
I’ve talked to many callers and I said if you have to do this, please give me a call back and let me know if the judge gave you costs. The one time someone did call me back and told me that the judge didn’t award them costs in addition to the mini tort. I think it depends on the judge.
Mike: I think generally they will award the costs in small claims court, even if there is no sort of reasonableness going on on the part of the at-fault driver. That’s the typical situation where the judge will make a small claim.
Jeff: There’s actually a lack of precedent setting law with the mini tort. You would think that because it’s a frequent case that there would be more case law on it. But really, it’s a $500 case up until October 2012, where it will change to $1,000. But it costs probably five times the amount of a mini tort to file an appeal. Generally, it’s the judge’s discretion. And you walk out and you just don’t happen to get your mini tort. It’s probably not economically worth it to file an appeal.
Mike: You do have to prove, if you file a mini tort action, that the other driver was at fault. The rules of evidence are very relaxed. There are none really in small claims. You can bring the police report, you can bring in witnesses, but you do have to prove that the other driver was at fault. If the judge were to find that you were partially at fault, say, 20% at fault, then he would reduce the amount of the award to you by 20%, or by whatever percentage he found you at fault, so you have to keep in mind when going in that you have to prove the other person was at fault. And you shouldn’t take it for granted.
Jeff: One other thing we talked about was how to get the mini tort. The general rule is copies of the police report to the insurance company. A copy of the declaration page, and a copy of your insurance policy showing you’re insured.
And that’s going to be important, because along with the increase to $1,000, uninsured vehicles will no longer be able to collect the mini tort. Originally it was kind of an open questions. Uninsured drivers lost out on other cases associated with an auto accident. But the mini tort was kind of one of these things where it was really the judges’ discretion. There was nothing in the law that said, “you’re uninsured, you can’t collect the mini tort.” So we always encourage people, if you think you’re entitled to it, and the insurance company won’t pay you because they don’t think they have to because you were uninsured, file a small claims suit. Depending on the judge, they may not want you to have the mini tort if you were uninsured.
But now the new law, there’s a definite on that, if you’re uninsured, you’re not going to be able to collect your mini tort.
Mike: Well that’s a great point to raise. That’s a very common question I get a couple times a week. Someone will call, they were in an accident, they were not at fault, but they were uninsured. Their policy had lapsed prior to the accident, and they ask, “Can I still get the mini tort?” You’re right, it’s a disputed question. I think Jeff and I both agree on this because we looked at it very closely. There’s nothing currently in the law, and again as Jeff noted this will change in October 2012, that prevents an uninsured driver from getting the $500 mini tort. But another great point you raise is, a lot of times, if you get before a judge, it’s a bit of a wild card issue, because it’s not a clear cut issue in the law, and the judge may look down upon you or frown on the fact that you didn’t have insurance. So it’s 50/50 that you could get it, maybe better than 50/50, but there’s nothing in the law currently that specifically prevents you from getting it.
But that is one of the major changes of the law that will go into effect in October is that it is very clear in disqualifying uninsured drivers from getting the mini tort, so it will make it a much easier question for us to answer.
Jeff: We’re going to talk about exceptions. One more question I always get is, “I can’t get a damage estimate because the car is totaled. I can’t drive it, it’s in my driveway.” And they’re requesting a damage estimate. Typically if you take photographs that are obviously in excess of whatever the mini tort is ($500 or $1,000), then generally that will suffice – a photograph instead of a damage estimate generally. If it’s obvious damage. If it’s not obvious damage, you’re going to have to somehow get an estimate for the damage.
Mike: And that’s consistent with my experience. If you have clearly visible damage, that is a good substitute for an estimate, which a lot of people have difficulty getting. But if it’s something where it’s more structural damage that you really can’t see that well from the outside, you’re going to have to get an estimate.
Jeff: And I always recommend people when they’re taking photos of the vehicle, they should get at least one shot of the license plate on the vehicle, just in case someone wants to cross reference the vehicle to the police report to make sure that they were actually taking a picture of their vehicle, not some random vehicle that matched the model number at junk yard. If you can. Sometimes it’s unrecognizable. But if you can get it, that’s advisable.
Mike: The mini tort stuff we’ve been talking about applies to a situation where you’re operating you car, you’re driving your car. You might be stopped at a stop sign or you’re driving through an intersection and somebody plows into you. The mini tort applies to that situation where you’re operating the car at the time of the accident. But if your car is parked, and somebody runs into your parked car, then that is a situation that is completely different and is treated differently under the law. There’s an exception in the Michigan No-Fault law that allows you to cover all of your vehicle damage that is incurred if somebody runs into your parked car. They key component here is that your car has to be parked in a reasonably safe manner.
Jeff: It’s treated as property damage. It’s not treated as a mini tort auto accident. So that’s important because you generally have three years to file a lawsuit on the mini tort. You only have one year to file on a property damage claim. I just got a call last week where the car was parked but it was in a no parking zone or something. And the insurance company for the person at fault did not want to pay the property damage because they said the car was illegally parked. My response was, file suit in small claims court for your damages, because just because a car is parked in the wrong place that you don’t think it should be doesn’t give you a right to destroy it.
Mike: You’re right. Your car can be illegally parked. That doesn’t mean it’s unsafely parked. Your car can be parked in front of a fire hydrant for instance, but if it’s right on the curb, it’s not unsafely parked, it’s just illegally parked. So if there was a fire, you’re blocking that. But that’s not a reason for the insurance company to not pay for your damage. The car has to be parked in an unsafe manner. And it can be parked illegally, but if it’s not unsafe, they still have to pay. And an issue that’s been brought up in the last couple of months by two different people I’ve talked to, is that they have had their parked cars hit, and the insurance company from the at-fault driver’s insurance has told them they’re only entitled to the mini tort. I don’t know if that’s an intentional thing, or if they’re just ignorant on the subject. But I’m always a little bit suspicious when an insurance company misstates the law. Is that something that you’ve run into Jeff?
Jeff: Yes, especially out of state insurance companies. Going back to that example where the person was hit by debris off the overpass from the truck, the insurance company was out of North Carolina. And they had a manual Michigan law and it basically said that in order for the mini tort to apply, it had to be paid off with a collision policy. But it doesn’t say that in the statute. The statute says up to $500, soon to be $1,000 of vehicle damage not covered by insurance. Who cares which part of the person’s policy paid for the collision coverage, whether it’s comprehensive or collision. I think it’s a matter of these insurance companies just don’t know what they’re talking about. And if you have to, you just file your lawsuit and you get the judgment. It says in the mini tort statute and it’s going to continue to say in the mini tort statute, whatever the result of the mini tort is, it has no effect on the other claim. In other words, someone could pay you the mini tort, but down the road if there’s a liability case because someone is seriously hurt, they can prove liability otherwise. There’s no effect from paying the mini tort on any other cases you may have.
But you’ve got to read these releases very carefully, because sometimes they will release all of your claims, or they’re not clear enough. So sometimes what I will do is mark them up for people so that it basically eludes to this is just a mini tort release only or for property damage only. Do not sign any releases that release any other claim. Even if you think you’re not hurt, don’t do it. You’ve got to be very careful about that. And also when you get the check, look the check over. I have seen twice on a check before that endorsing the check or depositing the check waives all claims. And in that case, you have to get written permission from the insurer, whoever issued that check, and cross that off before you deposit. It’s very important that you don’t waive other claims.
Mike: Yes. That’s a very scary thing. Because in addition to your mini tort claim that you have against the at-fault driver, you have a potential bodily injury claim as well if you’re injured under the threshold for the state of Michigan. And I’ve seen where insurance companies in paying off a mini tort claim have actually asked clients to sign releases, which would not only release the mini tort claim, it would also release the bodily injury claim, which could be worth multi-thousands of dollars. And you could be releasing that by signing a release for a $1,000 check. So if an insurance company wants you to sign a release, you’ve got to be extremely careful. Look it over extremely carefully, because as Jeff said, look over the entire check so there’s no language on there that suggests that you’re releasing all of your claims. That is a very, very great point.
Jeff: You can also release your No-Fault benefits, which is something we really aren’t talking about here, which is your first-party No-Fault (also called PIP) benefits with the release. Because it’s related to the accident that there’s a lifetime medical benefit to associate with that and you definitely don’t want to waive that either.
Mike: Absolutely. And if you have an questions about it or you feel like the insurance company is not being fair with you, you can always call us. Our telephone number is (800) 777-0028. There’s also a lot of information on the website at www.michiganautolaw.com.