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Limitations on No-Fault Insurance Claims

Apart from the time limitations for wage loss, survivors loss and household service claims, the most significant limitations on No-Fault benefit claims, are the following:

  • Causation defenses
  • "One Year Back" time limitations
  • Owned Uninsured Vehicle
  • Parked vehicles
  • Work-related auto accidents
  • Stolen vehicles

Causation

MCLA §500.3105 requires injuries and expenses to “arise out of” a motor vehicle accident; in plain English, that means that there has to be a causal link. Most of the time, insurance companies will claim that your injuries were caused by something other than the auto accident. They will actually hire one or more doctors to write a report, to the effect that your injuries were caused by something else, or are all resolved. You and I will need to discuss how to handle your matter, if this is what your insurance company is saying.

Time Limits

Under Michigan law, you have to give your insurance company written notice of your accident within one year; usually this is not a problem, but sometimes it can be. Then, in those cases where written notice of an auto accident is given within the one year, you have one year to sue on any unpaid No-Fault expense. MCLA §500.3145.

Michigan law used to provide extensions of time, where the insurance companies delayed payment, saying that the matter was “under investigation”. No more. No matter how much your insurance company may be trying to mislead you, they do not have to make payment on time-barred claims – up to a point.

It also no longer matters that a person may be cognitively damaged by an auto accident, nor does it matter if the injury victim is a minor. Either you sue on unpaid no-fault benefits within one year, or you lose the right to enforce them against the insurer.

Owned Uninsured Vehicles

If you are injured while driving an uninsured vehicle which you own, you are barred from getting No-Fault benefits. You are also barred from suing the at-fault driver. MCLA §500.3113.

By the way, “ownership” includes vehicles that you have free permissible access to, for 30 days or more in the course of a year. If, for example, your Aunt Millie lets you drive her car, 30 days or more in the course of a year, no questions asked, you are considered by Michigan law, to be an “owner” of that vehicle, with a duty to buy no-fault insurance. Your failure to do so, will result in you not being able to get no-fault benefits, even from Aunt Millie’s policy.

Parked Vehicles

No No-Fault benefits are available, when the vehicle is parked, unless the vehicle was parked in such a way as to cause unreasonable risk of the type of injury which occurred, or when the injury was caused by physical contact with equipment permanently mounted on the vehicle, while that equipment was being used (typically, a tow truck). MCLA §500.3106

Work-Related Injuries

If your auto accident-related injury took place on the job, there are no No-Fault benefits available, where you were loading, unloading, or doing mechanical work on that vehicle, unless the injury resulted from another vehicle, except those being loaded/unloaded (like tow trucks).

Also, there will be no No-Fault benefits payable for job-related injuries where you were injured getting into or out of the vehicle, unless those injuries occurred immediately after the vehicle became disabled; there is also the same “tow truck/another vehicle” language in this rule. MCLA §500.3106

(It’s confusing, I know; just give me a call).

Stolen Vehicles

Restrictions prohibiting no-fault coverage to persons who stole motor vehicles have been expanded to those “willingly using” a motor vehicle either stolen, or taken unlawfully, potentially including “joyriding” situations.

Other Section 3113 Exclusions. Most significantly, no-fault is denied to the person operating a motor vehicle or motorcycle, on which they are expressly excluded as a driver. As well, there is an exclusion for persons residing outside Michigan, who were occupants of a motor vehicle or motorcycle not registered in this state, and for which the none-resident insurer, did not file a “Certificate of Compliance”

The good news is that if you are a Michigan resident, and have a Michigan No-Fault policy, it will cover you for accidents anywhere in the United States and Canada, under MCLA §500.3111.

Learn more about Michigan No-Fault Insurance Laws & Protections.

Typically, health insurance pays “primary” to no-fault, meaning that the health insurer pays first, and any remaining unpaid accident-related expense should then be paid for by no-fault.  This is called “coordination of benefits”. There are exceptions to this for “ERISA-qualified plans”, discussed below.
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I cannot stress enough the importance of cooperating with your insurance company, before you have to hire me as your attorney. If you do have to hire a lawyer, he/she (or I) will be your contact with the insurance company.
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Sometimes, there are potentially more than just one insurance company, who might be responsible to pay your no-fault benefits.  Specific rules, allocating this responsibility are set forth in MCLA §500.3114, in order, more or less as follows:
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