News & Insights
Major Changes to the Michigan No-Fault Act Coming in 2020
The Michigan Legislature made major revisions to the Michigan No-Fault Act of 1973 by amendments with immediate effect June 11, 2019. Among the more significant changes are the 12 listed below:
- For policies effective July 1, 2020, or later, a consumer must be provided a choice of policy limits of $50,000.00, $250,000.00, $500,000.00, or unlimited, medical benefits ultimately payable, for an accident. MCL 500.3107c. Effective July 1, 2020, persons who present proof of health insurance that will pay expenses for persons insured under a no-fault policy in instances in which those persons suffer accidental bodily injury in a motor vehicle accident, may elect not to maintain coverage for medical expenses. MCL 500.3107d (1).
- In a cause of action for tort arising from ownership, operation, maintenance or use of a motor vehicle, the injured party can sue in tort for medical expenses incurred in excess of the elected limits under MCL 500.3107c. MCL 500.3135 (3)(c). Persons covered under a policy which does not provide medical expense coverage as elected under MCL 500.3107d have a cause of action in tort without limit for medical expenses. MCL 500.3135 (3)(c). Minimum automobile liability limits are raised, for policies issued on or after July 1, 2020, to $50,000.00 for bodily injury to, or death of, one person in any one accident. MCL 500.3009.
- Amendment of MCL 500.3112 to provide in the second sentence that “A health care provider listed in section 3157 may make a claim and assert a direct cause of action against an insurer, …to recover overdue benefits payable for charges for products, services, and accommodations provided to an injured person.” Previously, in Covenant Medical Center v State Farm MutualAutomobile Insurance Company, the Michigan Supreme Court held that the prior statute did not provide a direct cause of action to a health care provider.
- Amendment to MCL 500.3113 to provide among persons not entitled to be paid personal protection insurance benefits, a person who was not a resident of this state unless the person owned a motor vehicle registered and insured in this state. MCL 500.3113 (c). Previously, an insurer authorized to transact automobile insurance in this state had to certify that it would pay personal protection insurance benefits to its insured out-of-state residents, and claimants injured as a result of those out-of-state residents’ ownership, operation, maintenance or use of a motor vehicle, in accordance with the No-Fault Act.
- Amendment to MCL 500.3163 to provide that an insurer authorized to transact automobile liability and personal protection insurance in this state is not required to provide personal protection insurance or property protection benefits for accidental bodily injury occurring in this state arising from the operation, maintenance, or use, of a motor vehicle as a motor vehicle by an out-of-state resident who is insured under that insurer’s liability insurance policies, unless the out-of-state resident is a the owner of a motor vehicle that is registered and insured in this state. Previously, an insurer authorized to transact automobile insurance in this state had to certify that it would pay personal protection insurance benefits to its insured out-of-state residents, and claimants injured as a result of those out-of-state residents’ ownership, operation, maintenance or use of a motor vehicle in accordance with the No-Fault Act.
- Amendment of ML 500.3114(4) to provide that the occupant of a motor vehicle not covered under a personal injury protection policy shall claim personal protection insurance benefits from the Assigned Claims Facility. Previously, such an occupant claimed benefits from the insurer of the owner(s) or, if none, insurers of the operator of the vehicle occupied.
- Amendment of MCL 500.3115 to provide that persons injured in motor vehicle accidents who are not covered by a personal injury protection policy while not an occupant of a motor vehicle, i.e., bicyclists, pedestrians, shall claim their benefits from the assigned claims facility. Previously, such persons claimed benefits from the insurers of the owner(s) or operator(s) of motor vehicles involved in the accident.
- Amendment of MCL 500.3135 (3) to allow recovery for economic damages by a non-resident provided the non-resident sustains serious impairment of body function. Previously, recovery of economic damages in tort for injuries sustained by non-residents injured in motor vehicle accidents in this state was limited to work loss in excess of the monthly and three-year maximums of MCL 500.3107(1)(b).
- Amendment of MCL 500.3135 (5) to define serious impairment of body function as an impairment that is objectively manifested, meaning it is observable or perceivable from actual symptoms or conditions by someone other than the injured person, of an important body function, that affects the person’s ability to lead his or her normal life, meaning it had an influence on some of the person’s capacity to live is or her normal manner of living, essentially a codification of the Michigan Supreme Court case of McCormick v Carrier, construing the prior statute.
- Amendment of MCL 500.3145(1) to provide that where notice of loss as required by that statute is provided to the insurer within one year of the date of the motor vehicle accident for which benefits are sought, and a claim for specific benefits is thereafter made to the insurer, the claimant has one year from formal denial of the claim for specific benefits to commence suit on those benefits, provided that the person making the claim has pursued the claim with reasonable diligence.Prior case law, Devillers v ACIA, provided that a claimant had one year from the date any individual expense was incurred to bring suit on that expense, regardless of the denial date.
- Amendment of MCL 500.3151, providing for independent medical examinations, to provide that the physician who conduct the examination must be licensed in the State of Michigan, board certified or board eligible to practice in the area appropriate to the injured party’s condition, and that during the year immediately preceding the examination, the physician must have devoted the majority of his professional time to clinical practice appropriate to the injured party’s condition, or the instruction of students in an accredited medical school, or accredited residency or clinical research program for physicians, in the applicable specialty. This is a new requirement.
- Effective July 1, 2021, a physician, hospital, clinic, or other person that renders treatment to a person who suffers accidental bodily injury from a motor vehicle accident is limited to reimbursement based on percentages of the amount payable under Medicare to that person for that treatment. MCL 500.3157.