ABATE of Michigan Inc.
P.O. Box 99
Constantine, Mi. 49042
Phone: 269 435-2058
“Important information about changes to Michigan No Fault Law”
I have been writing for years about the continued efforts by the insurance industry to pass legislation which would reduce and/or eliminate Michigan no fault benefits which provide payment of items such as medical expenses, home modifications, attendant care, wage loss, household services and medical mileage for those injured in an accident involving a motor vehicle. When these past bills have been proposed, ABATE of Michigan on behalf of motorcyclists across the State, and other concerned groups with an interest in protecting our no-fault benefits have travelled to Lansing to vigorously advocate such bills and have been effective in stopping the passage of such bills.
However, on May 30, 2019, Governor Whitmer signed into a law a no-fault reform bill which makes devastating sweeping changes to the no fault landscape as we knew it. A substitute version of the bill was adopted on May 24, 2019 and on that very same day the House and Senate voted the bill through to Governor Whitmer. Without opening the bill up to hearing and public scrutiny as prior bills had been, there was very little opportunity for anyone to voice opposition to the bill and it was signed into law.
The effects are devastating to anyone injured in an accident involving a motor vehicle and as to motorcyclists, it has potentially crippling effects due to the discriminatory language of the bill aimed directly at motorcyclists.
The effects of the bill are many and far reaching. Also, there are some portions of the bill that may take some interpretation from our court system to really flesh out what effect they may have. The point of this article is to point out some, but certainly not all, of the points of this new bill. Be advised that this summary is not be construed as legal advice and an attorney should be consulted if anyone has any questions regarding the new law’s specific applicability to any given situation.
1. Persons applying for or renewing their auto insurance will now be given a choice to opt out or cap their medical expense coverage under no fault. Those choices will include opting out of medical expense coverage completely (if the person has Medicare and any spouse or relative in the household have health insurance which covers accidents, Medicare or is covered under another auto policy); capping at $50,000.00 (if the person has Medicaid); $250,000.00; $500,000.00; or to keep unlimited benefits as the “old” no fault law provided for. In my opinion, I would strongly suggest that everyone choose to keep unlimited no fault benefits on their policy for many reasons including but not limited to, even if you have health insurance there may be certain expenses that health insurance does not cover and there will likely be copays or deductibles that you would still be responsible for. The new law says that in exchange for the cap, persons will be offered reductions in their no-fault premium ranging from 45% to 10% depending on which cap was chosen. Notably, such discount is only applicable to the line item premium paid for no fault coverage on your policy, it is not a discount on the grand total amount of your insurance premium. Also, the bill provides that such discounts are only available through July 1, 2018 and provides an out clause for the insurance companies that exempts them from having to provide any discount if it would result in a violation of the insurers constitutional rights or reached a risk level to the insurers capital.
HERE IS THE POTENTIALLY CRIPPLING EFFECT THIS HAS ON MOTORCYCLISTS: When a motorcyclist is involved in an accident with a motor vehicle, it is the insurer of the owner, registrant or operator of the involved automobile that is first in priority to pay the motorcyclists no fault benefits. Thus, under the new law, a motorcyclist is bound by the cap that the motorist chose for himself/herself on his/her own auto policy! For example, if the motorist chose a $50,000.00 cap for himself on his auto insurance policy and he is involved in an accident with a motorcycle, the motorcyclist’s no-fault benefits are capped at $50,000.00! Thus, while motorists will have a direct choice on the amount of no-fault benefits available in the event they are injured in an accident, motorcyclists have no such choice. There are limited exceptions where a motorcyclist may bypass the auto policy and look to the next policy in order of priority to pay, but even with the exception, once you reach an insurance policy in proper priority to pay, the motorcyclist is bound by the applicable cap on the policy. For this reason, I would strongly suggest that all motorcyclists opt for unlimited no-fault benefits on their auto insurance policies. This is because if it turns out that the owner, registrant or operator of the involved automobile was uninsured or was insured but one of the limited exceptions to bypass the policy exists, the next insurer in line to pay the claim is the auto insurer of the operator, owner or registrant of the motorcycle. Under that circumstance, if the operator, owner or registrant of the motorcycle chose unlimited benefits, the injured motorcyclist would have unlimited benefits.
2. Attendant care provided in the patient’s home by the patient’s relative, someone who lives in the home, or any person who had a business or social relationship with the patient before the accident, is capped at 56 hours per week. This will significantly impact those with significant injury who require more than 56 hours of attendant care per week, as they will have to find an agency to provide case in excess of the limit.
3. Auto insurance policies will be required to carry a minimum residual liability policy limit of $250,000.00 per person/$500,000.00 per accident, however an insured can opt to only purchase coverage in the amount of $50,000.00 per person/$100,000.00 per accident. This is the coverage that applies to cover an injured person’s “pain and suffering” claim against an at fault driver. This is an increase from the old no fault law which only required a policy to carry $20,000.00 per person/$40,000.00 per accident. For those with significant injury who are exceed the applicable no-fault cap, this increase doesn’t mean much. This is because, as part of the new law, you can claim excess medical expenses as part of this claim. If you have medical expenses that far exceed the applicable no-fault cap, you may be paying most or all of your “pain and suffering” recovery to simply go towards medical expenses.
4. Out of state resident involved in a Michigan accident are not entitled to no fault benefits unless he/she owns a motor vehicle registered and insured in Michigan. Thus, if you have friends or family from out of state visiting Michigan, be sure they are up on their health insurance and have a disability policy to take care of lost wages because if they don’t own a vehicle owned and registered in Michigan they are on their own hook if they are involved in a motor vehicle accident.
5. Medical providers are to be paid pursuant to a fee schedule based on the Medicare fee schedule. The general rule is that medical providers are not eligible to be paid more than anywhere from 190% to 200% of the amount that would be payable under Medicare. There are some exceptions based on the nature of the medical provider but most all payment is based on a Medicare fee schedule.
On a more positive note, the new law is that it prohibits auto insurers from establishing rates based on things such as a person’s credit score, sex, marital status, home ownership, education level, occupation or zip code. It also calls for an independent audit of the Michigan Catastrophic Claims Association every three years starting on July 1, 2022 and if its assets exceed 120% of its liabilities it may pay refunds if it doesn’t threaten their ongoing ability to provide reimbursement to insurers.
This new law is very complicated and time will tell the extent of the repercussions that the new law will have on injured people in our State.
I extend an open invitation to all Regions to have me out to discuss this new law, how it affects injured motorcyclists specifically and provide my suggestions on what a motorcyclist can do to protect himself/herself in the wake of these wide sweeping changes.
As always, if anyone has any questions or if I can be of legal assistance to you or anyone you know dealing with this issue or who has been injured in a motorcycle accident, please don’t hesitate to contact me as I deal with these types of claims on a daily basis on behalf of injured motorcyclists statewide.
Further, if you would like to have me come out to your Region to speak or give a presentation on the legal rights of an injured motorcyclist or on any specific topic that your region may be curious about, please don’t hesitate to give me a call at (248-569-4646) or shoot me an e-mail at Dondi@buckfirelaw.com. I give presentations to Regions state-wide and there is never a charge associated with having me out. I enjoy having the opportunity to come out and meet motorcycle enthusiasts from all parts of our State!
Dondi Vesprini email@example.com
Phone: 248 569-4646
ABATE of Michigan
Fighting for the rights of all motorcyclists since 1976