Whose insurance company is required to pay no-fault PIP benefits?
The Michigan No-Fault Act contains a “priority of payment” system that determines which no-fault insurer has primary liability for payment of PIP benefits. This priority system is set forth in Sections 3114 and 3115 of the Act.
The General Rule
The general rule contained in these sections is that an injured person receives no-fault PIP benefits from his or her own no-fault insurance company (assuming they are insured under a no-fault policy) or from a no-fault policy issued to the injured person’s spouse or a relative of either domiciled in the same household.
This general rule applies regardless of whether the injured person is driving or occupying his or her own motor vehicle, is a passenger in another vehicle, or is a pedestrian or a bicyclist.
Vehicle Occupants Not Otherwise Covered
Section 3114(4) makes clear that if a person is injured while riding in a vehicle, but does not himself carry no-fault insurance, and does not have coverage under any other policy, such as through a spouse or relative then that individual would seek coverage from the insurer of the owner or registrant of the vehicle in which he was riding at the time he sustained injury.
If coverage is not available through an insurer of the owner or registrant, then the injured person must submit his or her claim for no-fault benefits to the Michigan Department of State, Assigned Claims Facility. This is a governmental office that has been established as the “place of last resort” for auto accident victims. When a claim is submitted for the Facility, it is randomly assigned to one of the many auto insurance companies authorized to do business in the State of Michigan. As of 2020, the address and phone number of the Assigned Claims Facility are:
Michigan Department of State Assigned Claims Facility
7064 Crowner Drive
Lansing, MI 48918-1412
IMPORTANT: Under the Michigan No-Fault Reforms of 2019, any person claiming benefits through the Assigned Claims Plan is limited to only $250,000 of medical expense coverage for their injuries.
Non-Occupants Not Otherwise Covered
If the injured person was not an occupant of a vehicle but rather was involved in the accident in some other capacity (such as a pedestrian or bicyclist struck by a car), and that person is not otherwise covered under a no-fault policy, section 3115(1) makes clear that the injured victim may seek coverage from the owner or registrant of the involved motor vehicle, or if no coverage is available there, then the person will have to claim benefits through the Michigan Assigned Claims Plan (ACP). Due to the recent reforms for the Michigan No-Fault Act, a person claiming no-fault benefits through the ACP is capped for medical coverage at $250,000.
Exceptions to the General Priority Rule
There are a number of exceptions to these general rules of priority for collecting no-fault benefits. These exceptions include:
(1) Vehicles for Hire – In these situations, the injured victim may collect no-fault benefits directly from the vehicle for hire’s insurer, regardless of whether the victim himself has a no-fault policy. Section 3114(2). However, there are a number of exemptions to this exception.
(2) Employer-Provided Vehicles – Section 3114(3) provides that if an individual is injured while an occupant of a motor vehicle owned or registered by his employer, he may collect no-fault benefits directly from his employer’s insurer, regardless of whether he is insured under his own no-fault policy. This section also allows the injured victim’s spouse and other relatives living in the same household to collect benefits through the employer’s policy. There is no requirement that the injury occurs while in the course or scope of employment.
(3) Motorcycle Accidents – Motorcyclists are not required to purchase no-fault insurance policies under the Michigan no-fault law. However, when a motorcyclist is injured in a collision with a motor vehicle, the injured motorcyclist is still entitled to collect no-fault benefits. This is a complicated area, but generally, the injured motorcyclist will look first to the insurer of the involved motor vehicle’s owner or registrant.
Learn more about motorcycle accident insurance.