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Automobile accidents and catastrophic loss in Michigan — a primer

April 30, 2016
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In literally a second, a life can be changed on Michigan roads. 

Automobile accidents can be simple fender benders, but can also be catastrophic collisions, permanently injuring or even killing you or a loved one. Most troubling is that it can happen at any time and to anyone, regardless of age, race, gender or socio-economic status. When an accident occurs, the last thing the victim or their family needs is to spend precious time understanding Michigan’s No Fault Auto laws or preserving their legal rights. The following is a very cursory overview of Michigan’s No Fault system, along with some ideas of when it may be a good time to seek help from a lawyer who specializes in auto crashes.

Michigan’s No Fault Auto law system

Years ago, Michigan’s legislature enacted the current No Fault Auto law in an attempt to efficiently streamline things like medical care and wage loss to the victims of auto accidents, regardless of who might be “at fault” for the crash. These types of benefits are known as “First Party” or “PIP” benefits and, with a few exceptions, are most often provided by each driver’s own insurance company, regardless of who was “at fault” for the accident. To reconcile these automatic benefits to an injured person, the legislature also limited one’s ability to sue the “at-fault” driver for traditional tort system “non-economic” losses, such as pain and suffering and emotional distress. If a threshold injury could be shown, only then could a lawsuit be filed against the at-fault driver. These types of lawsuits are called “Third Party” claims under Michigan’s auto laws.

First Party claims

Again, each person who’s injured in a Michigan auto accident, with a few exceptions, is entitled to First Party benefits from his or her own auto insurance company, regardless of fault. The substantive benefits include the following: reasonable and necessary medical and rehabilitative expenses for life, as long as the medical care is necessitated by injuries sustained in the accident; wage loss for the first three years after the accident; certain daily replacement services for things necessitated, because of the crash (e.g., house cleaning expenses and yard work). It is important for a victim to immediately notify their own insurance company if they have been in an accident, so that a can be claim started. It is then imperative that the insurance company and claim information be given to all billing specialists at the hospital and other health care providers’ offices, so that the auto insurance, as opposed to the victim’s health insurance, Medicare, Medicaid or the victim is billed for the medical care. Ensuring this is done at the beginning can save a lot of time and energy unwinding certain bills and medical payments down the road.

After the most immediate medical needs are taken care of, it is also very important for the victim to stay in constant communication with the claims handler assigned by their automobile insurance company. Insurance companies are sticklers, and they will not pay out First Party benefits unless they get cooperation and sufficient information from their insureds. For example, insurers will want to see proof of work at the time of the accident and recent paystubs prior to paying out wage loss benefits. Again, this communication from the very beginning will save a lot of time and energy down the road.

Third Party claims

No one wants to be eligible to bring a Third Party claim, but given the nature of vehicular crashes, they commonly occur. A Third Party claim is most typically when a lawsuit is brought against an at-fault driver, because they were negligent and then caused the victim to suffer a “threshold” injury. No longer can a victim bring a lawsuit against an at-fault driver for non-economic damages suffered from relatively minor injuries, such as soft-tissue damage and minor whiplash. Under Michigan law, a threshold injury is defined as 1) death, 2) permanent serious disfigurement or 3) a serious impairment of a body function. Out of the three threshold exceptions above, oftentimes it is the third exception that is most fought over in court. It is important to note that a serious impairment injury need not be permanent to qualify as a threshold injury. For example, if someone broke their leg and could not walk for three months, it’s safe to say in most circumstances that that person has suffered a serious impairment that, at least for a time, affected the person’s general ability to lead their normal life. Again, the threshold need only be met for claims of non-economic loss. A person always has the right to pursue the at-fault driver for economic loss in excess of First Party benefits (although, I have yet to ever have an excess claim that did not also qualify as a Third Party threshold claim).

Like First Party benefit matters, when someone dies or is seriously injured in a crash, there are certain urgent tasks that should be accomplished so as to best preserve someone’s Third Party legal rights. Again, Third Party claims are for losses in excess of First Party benefits, things such as excess wage loss (primarily wage loss after the first three years), pain, suffering and emotional distress. For someone who dies, their estate is entitled to excess wage loss and financial support to dependents, the loss of love, society and companionship to the family members and the victim’s conscious pain and suffering prior to their death. Sometimes this latter category is a matter of seconds. Other times it’s a matter of years.

Obviously, in serious crashes, it is the defendants who have the initial advantage in gathering facts and information about the crash. For example, many large trucking companies will have “go teams” of lawyers and investigators who will immediately go to the crash scene, observe the first responders and law enforcement personnel conducting their investigations, do investigation of their own, talk with witnesses, download vehicle data recorders, etc. Before the victim and their family can even understand the realities of their situation, defendants oftentimes have their initial investigation concluded and their evidence preserved. Thus, it is obviously most critical that the victim or their family take the time to consider calling an attorney, or at a minimum, engaging a friend to help them find the proper representation as soon as possible. The reality is this: evidence, like skid marks in the road, go away; 911 dispatch calls with the county are eventually erased; the vehicles involved in the car crash are often totaled and then sold by the insurance companies. These are just a fraction of the critical pieces of evidence and information that must be preserved in order to have the best chance at fighting for and winning a Third Party action against an at-fault driver.

Conclusion

While the above is a very generalized introduction to Michigan’s auto laws, it is our hope that the overview gives the reader a foundation for understanding the rights of auto crash victims. As the old saying goes, “You snooze, you lose.” And Michigan auto laws are not an exception. Ultimately, it is the victim’s job to prove to their own insurance company that they are entitled to First Party No Fault benefits. It is the victim’s job to prove that someone who caused a catastrophic auto crash was negligent, and that their negligence caused injuries qualifying for a Third Party action against the at-fault driver. Early assessment of a victim’s rights, communication with the victim’s own insurance company and preservation of all possible evidence for a Third Party claim can be all the difference between achieving success in an automobile claim or just being “run over” by the system.

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