Auto accident insurance in Michigan is quite a bit different from most states. It is only 1 of 12 states in the entire US that has some form of no-fault auto insurance enacted. The idea behind no-fault is that it would provide better medical treatment and care for individuals involved in an auto accident. Essentially, it was meant to simply the process and cut down the number of lawsuits flooding the system. Regardless of who is at fault for the accident, both parties would receive the care they need. In fact, when you file a first party claim you actually file it against your own insurance company who is responsible for all first party benefits. Michigan divides the two benefits between first party benefits and third party benefits. As I have already stated, your own insurance company is responsible for the first party benefits which include allowable expenses, income loss , replacement services, attendant care , and mileage to and from a medical facility. In order to receive third party benefits you must sue the negligent driver and this covers expenses not related to medical expenses such as pain and suffering.
While the Michigan No-Fault Law usually does an adequate job of covering medical expenses, most people don’t realize they are sacrificing their ability to successfully bring a third party lawsuit. Extra difficult thresholds and conditions must be met in order to even bring a third party lawsuit. In most states, suing the negligent driver (3rd party) is how accident victims recover all of their compensation regardless of the severity of the injury. In Michigan, you must have a serious injury which passes a certain threshold to even bring this type of lawsuit. Proving an injury passes this threshold can be excruciatingly difficult at times. You will need a skilled accident attorney to help you prove your injury resulted in a serious impairment, permanent disfigurement, or death.
On top of this, Michigan insurance companies claim that they aren’t making enough money and have increased rates and prices with no substantial evidence to back their claim. They have been sued to reveal their financial records, but they refuse to do so. I find it hard to believe that the State with the highest auto insurance costs in the country is also non-profitable, its just a lie. Michigan is one of the most profitable states for insurance companies nationwide, do a little investigating for yourself and you’ll find the truth.
Matthew R. Clark is a Lansing Car Accident Lawyer at The Clark Law Office. We are trial lawyers defending the rights of accident victims for over 30 years in Michigan.