No-Fault insurance is designed to give you peace of mind that if a car crash happens you will be taken care of financially. But for how long? How does a permanent disability from a catastrophic auto accident affect your no-fault benefits? Are there other ways you can be compensated for your injuries? Here are some basics on permanent disability and no-fault benefits in Michigan.
Thirty years ago, two young sisters were in a catastrophic auto accident. Amy and Lora Cooper each suffered serious, and permanent disability. Amy was left legally blind and nonverbal. She requires a special wheelchair and tube feedings. Lora suffered severe brain damage that took away her speech and much of her ability to understand complex ideas. Now she requires constant monitoring to make sure she does not harm herself.
The women live together in an apartment subsidized by the auto insurance company that covered the crash. For the last 30 years, the insurer had paid for medical assistance, nursing care and housing expenses. But when the sisters' mother died in 2016, the insurance company sought to reduce their no-fault benefits, cutting out their rent payments. The change has caused a lawsuit that raises the question: How much does an insurance company have to cover in a catastrophic accident?
The Michigan No-Fault Act directs when, and how much, auto insurance providers have to pay benefits to their customers. According to the law, an insurance company is required to pay benefits for "accidental bodily injury arising out of the ownership, operation, maintenance or use of a motor vehicle...." That includes all reasonably necessary charges for "products, services, and accommodations for an injured person's care, recovery, or rehabilitation."
Michigan's insurance law puts no limit on the amount of benefits paid for a particular injury. When a catastrophic car accident results in permanent disability, the insurance company will be required to pay the injured motorist's medical expenses for life.
To cover the cost of these lifetime medical expenses, Michigan created a non-profit association of all its insurers called the Michigan Catastrophic Claims Association (MCCA). This association reimburses insurance companies when a serious or permanent disability accident causes medical costs to rise above $545,000. The cost of membership is paid by a fee charged on each insured vehicle. In July 2017, that fee will be $170 per car per year.
In addition to medical expenses, Michigan no-fault benefits cover lost wages and replacement services, like child care or landscaping. However, unlike the medical expense provision (which includes attendant care costs), wages and replacement costs are limited to the first 3 years after a crash. In a case with permanent disability, those losses continue far beyond the limit of no-fault benefits.
Michigan law allows for the victims of serious or disabling auto accidents to file third party negligence lawsuits against at-fault drivers. These lawsuits can fill the gap between the limits of no-fault and the true cost of a catastrophic auto accident. In addition to life-long lost wages and replacement services, a plaintiff in a third party lawsuit can sue for non-economic injuries including loss of enjoyment of life, disability, disfigurement, and pain and suffering.
Plaintiffs' attorneys in third-party lawsuits must prove fault and give juries guidance to put values on the non-economic aspects of personal injury. At Sachs Waldman, we have extensive experience helping auto accident victims recover PIP benefits from no-fault insurance providers and non-economic damages from negligent drivers. We can help you get your expenses covered. Contact our Detroit personal injury law office at 1-800-638-6722.