Common Questions

The Michigan no-fault law provides certain benefits to an injured person without regard to who was at fault in the accident. These benefits are called no-fault benefits. They can be thought of as a type of health and disability policy that insures the person and his or her family whether the injured person was in their motor vehicle or someone else’s or was a pedestrian.

The following benefits MUST be documented and prescribed by a physician:

A.) Lifetime Coverage of Medical Costs:

The No-Fault Act requires that the no-fault insurer pay all reasonable charges for necessary products, services, and accommodations for an injured person’s care, recovery, or rehabilitation arising out of a motor vehicle accident. The medical expenses are payable for life and are unlimited in amount. Medical benefits include such things as hospital bills, doctor’s visits, medical tests, physical therapy, prescriptions, appliances, transportation to and from medical care, vans, wheelchairs, home modifications, and home or residential care, including attendant care provided by family members.

B.) Attendant Care:

Attendant care provides the patient with help taking care of his/her own personal needs including but not limited to, dressing, using the restroom, supervising, driving to/from doctor’s appointments, ambulating, passing medications, anything needing patient to bend or twist, feeding, cooking meals, ambulating all general hygiene needs.
Attendant care can be provided by a professional (i.e. a home health care service)or a family member depending on the extent of care the injured person requires. Therefore, the hourly rate of reimbursement varies and is calculated upon the level of medical training the caregiver has. This rate will be calculated by our office; however, it may be challenged by the insurer. It is the law firm’s job to demand, obtain and maintain a proper benefit in this area.

C.) Replacement Services:

Replacement services are those household tasks that the injured person would have performed for himself or herself or his or her dependents. Replacement service benefits have a maximum of $20 per day. The replacement services are only payable for the first three years after the accident. Typical replacement services include such things as housecleaning, washing dishes, yard work, home maintenance, babysitting, child transportation, etc. The service can be hired and paid to non-family members or provided by family members with a payment or promise to pay by the injured person. Benefits for replacement services are not adjusted for inflation and have not been increased since the act was enacted in 1973.

D.) Mileage:

The mileage rate changes every year and is regulated by the IRS. The allowable reimburse rate for 2010 is .50¢ per mile. This benefit may or may not be prescribed by your physician. It is important to note that any mileage incurred for doctor’s appointment, prescription pick-up or any other trip related to the treatment of your injuries are reimbursable.

E.) Modifications to Home and/or Vehicle:

Any modification done to your home or vehicle (including the purchase of a vehicle that would accommodate a wheelchair lift) would be a reimbursable expense.

F.) Wage Loss:

The No-fault Act provides benefits for wage loss that are payable for three years from the date of the accident. The wage loss benefits may be up to 85 percent of a person’s wage and salary or the current monthly maximum amount, which is approximately $4,878 per month whichever is less. This is the maximum amount pursuant to MCL 500.3107, which covers any accidents occurring between October 1, 2009 and September 30, 2010. The monthly maximum in effect at the time of the accident is the maximum for that injured person for the next three-year period. However, the no-fault wage loss maximum is adjusted annually for inflation. The income that is recoverable is what you would have earned, not what you could have earned. It is also not based necessarily on the last year or even the last month’s earnings. A new job, a promotion, and a new wage rate (if provable) is recoverable under no-fault insurance.
No-fault wage loss benefits are paid at the 85 percent rate since the statute assumes a 15 percent tax reduction. The no-fault insurer is allowed a tax reduction from the gross wage since the no-fault wage loss received is tax free under the Internal Revenue Code.
No-fault wage loss does not include most fringe benefits unless they are actual monetary payments such as cash bonuses or contributions to a specific savings or retirement fund. Other non-cash fringe benefits such as health insurance, life insurance, etc., are not recoverable as a no-fault wage loss. However, no-fault wage loss does include overtime pay, wage increases, and bonus payments that are lost. Your employer will be asked to complete a Michigan no-fault Insurance Law Wage, Salary and Benefit Verification form.

G.) Tax Consequences for First Party Recovery:

In most cases the amount a claimant receives in a personal injury action, is not taxable; however, you should always consult your tax advisor with specific questions; however, the recipient should always consult their tax advisor with specific questions.
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