The Truth About Unlimited Medical Coverage & Michigan No-Fault Law


Contrary to popular belief, Michigan no-fault insurance does not provide unlimited medical coverage. It’s important to remember this in the ongoing discussions about reforming the no-fault system.

As efforts to revise the Michigan no-fault insurance system continue, it’s unfortunate that some information being provided to the public is inaccurate — particularly the assertion that no-fault insurance provides unlimited medical coverage to persons injured in an auto accident in Michigan.

Certain media reports and statements from people involved in no-fault reform have incorrectly conveyed that one reason why Michigan has high auto insurance rates is that “unlimited lifetime medical benefits” are provided to those who suffer catastrophic injuries in auto accidents.

This simply is not true. No-fault insurance does not offer unlimited medical coverage to persons injured in a Michigan auto accident. Neither the no-fault law itself nor decisions from the Michigan courts interpreting the law say that car crash survivors are entitled to unlimited benefits.

The Law Doesn’t Say “Unlimited” Medical Coverage

Here is the language of MCL 500.3107(1)(a) of the No-Fault Act, which explains the no-fault personal injury protection (PIP) benefits that are allowed:

(1) Except as provided in subsection (2), personal protection insurance benefits are payable for the following: (a) Allowable expenses consisting of all reasonable charges incurred for reasonably necessary products, services, and accommodations for an injured person’s care, recovery, or rehabilitation.”

Take particular note of the words “reasonable charges” and “reasonably necessary.” Then ask yourself this question: does reasonable charge + reasonably necessary = unlimited medical coverage?

No, it does not.

Why are the phrases “reasonable charges” and “reasonably necessary” used in the no-fault law? The answer to that is: They serve as a check on what auto insurance companies pay and what medical providers may claim. Accordingly, it is incorrect to say that no-fault medical benefits are unlimited — i.e., because there are limits on what insurers pay and on what providers can claim.

Insurers Don’t Want To Pay Unlimited Medical Benefits

TThe fact of the matter is, insurance companies don’t want to pay unlimited medical benefits. In fact, insurers frequently use the language in MCL 500.3107(a)(1) to deny or stop paying no-fault PIP benefits that should otherwise be paid, oftentimes alleging that the course of medical treatment or rehabilitation is unnecessary.

In many instances, an insurance company will ask a car accident victim to undergo an “independent medical exam” (IME) with a doctor of the insurer’s choosing. Chances are, that doctor — selected by the insurance company — will conclude that medical treatment is no longer necessary or, if it is, then perhaps not at the level that’s needed. Relying on the opinion of the IME doctor (and often ignoring the opinion of the survivor’s actual treating physician), many insurance companies will deny or stop paying a claim for PIP benefits. In turn, the providers treating the crash survivor must file a lawsuit against the insurance company to get the claim for unpaid benefits resolved. This is especially true when the victim is recovering from a catastrophic injury.

What it boils down to is this: it’s inaccurate to use the word “unlimited” to describe the available medical benefits under Michigan’s no-fault law. The word “unlimited” implies that insurance companies pay 100% of PIP claims 100% of the time — and that’s simply not the case.

If you have questions about your no-fault insurance coverage or about no-fault reform, our experienced attorneys are here to help. Contact our Lansing car accident lawyers or Grand Rapids auto accident attorneys today for a free consultation. Or call 866-758-0031.