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How to Claim No-Fault Benefits When No Policy Applies
Michigan pays personal injury protection benefits through the injured person’s own policy, which works until there is no policy to look to. That situation is more common in Detroit than the design of the no-fault act assumes, and the statute answers it with a separate route that has its own form, its own administrator, and its own deadline.
The route is the assigned claims plan, run by the Michigan Automobile Insurance Placement Facility. MCL 500.3172(1) opens it to a person injured in a motor vehicle accident in this state where no personal protection insurance applies to the injury, where none applicable can be identified, where none can be ascertained because insurers are disputing coverage between themselves, or where the only identifiable coverage is inadequate because an insurer cannot meet its obligations.
The Four Doors Into the Plan
Those four conditions are broader than the phrase “uninsured driver” suggests. The first covers the case people picture, where nobody involved carried PIP. The second covers a hit and run, or a vehicle whose coverage cannot be traced.
The third is the one most often missed. Where two or more automobile insurers are arguing about which of them owes coverage, or about how the loss should be split, the injured person does not have to wait out that dispute. The statute treats an unascertainable insurer the same as an absent one, and benefits can be claimed through the plan while the carriers sort themselves out.
The fourth reaches insurer insolvency, where a policy exists on paper but cannot deliver benefits up to the prescribed maximum. Our Michigan No-Fault Insurance Guide covers how the coverage levels chosen after the 2019 reform interact with each of these situations.
One Year to Notify, and It Is a Different Year
MCL 500.3174 requires a person claiming through the plan to notify the Michigan Automobile Insurance Placement Facility within one year after the date of the accident. On an initial determination of eligibility, the facility promptly assigns the claim and tells the claimant which insurer it went to.
That one-year notice runs against the facility, not against an insurer, and it is easy to lose while someone is still trying to work out whose policy applies. Time spent waiting for two carriers to resolve a coverage dispute is time running against this deadline, which is exactly why the third door exists.
The statute then routes the lawsuit back to the ordinary rule. An action by a claimant must be commenced as provided in MCL 500.3145, so the limitations analysis that governs any other PIP claim governs this one once the claim is assigned.
What the Application Requires
A claimant files a completed application on a claim form provided by the facility and supplies reasonable proof of loss. The facility, or the insurer assigned to administer the claim on its behalf, must then specify in writing what materials constitute reasonable proof of loss, within 60 days after receiving a compliant application.
That written specification is worth insisting on. It converts an open-ended request for documents into a defined list, and it starts from the date a complete application was received rather than from whenever the file is picked up.
One limit is written into the same section. The facility or the assigned insurer is not required to pay interest for any period during which the claim is reasonably in dispute, so delay here is not penalized the way it is elsewhere in the act.
What This Does Not Replace
The assigned claims plan supplies personal injury protection benefits. It does not supply a claim against the driver who caused the crash, and the two proceed separately on separate timetables.
A claim for noneconomic loss against the at-fault driver still requires death, serious impairment of body function, or permanent serious disfigurement under MCL 500.3135(1), and still runs on the three-year period in MCL 600.5805(2) rather than on either of the one-year rules above. Detroit crashes are litigated in the Wayne County Circuit Court, and our Michigan personal injury attorneys handle those claims alongside the benefits side.
The mini tort is where the interaction turns cruel. A claim for up to $3,000 in vehicle damage from the at-fault driver is available under MCL 500.3135(3)(e), but subsection (4)(e) provides that damages must not be assessed where the damaged vehicle was being operated without the security the act requires. An uninsured driver can reach PIP benefits through the assigned claims plan and still recover nothing for the car.
The plan also has a recovery mechanism of its own. Unpaid benefits due or coming due may be collected under it, and the insurer to which a claim is assigned is entitled to reimbursement from the defaulting insurers to the extent of their financial responsibility. A claimant does not have to fund that dispute or wait for it to finish.
The facility deadline is the one that runs quietly, because nothing arrives in the mail to mark it. It is worth calendaring the day of the crash. One call is usually enough for us to tell you where things stand. Call us at (800) 525-6386.
If Nobody’s Policy Seems to Apply
An injured person with no obvious insurer is not without a claim, and the assumption that they are is what causes the one-year notice to pass unnoticed. We handle no-fault claims at Neumann Law Group in Detroit and across Michigan, including claims routed through the assigned claims plan. We are glad to talk through any of these questions. Call (800) 525-6386 or send us a message and we will get back to you.