Car Accident / No Fault Insurance

Learn all about auto accidents and no fault insurance in Michigan, including the difference between first and third party benefits and the Kreiner standard.

Summary

In Michigan, actions for injuries resulting from a motor vehicle accident are controlled by the No-Fault Insurance Act, MCL 500.3101, et seq. Under the No-Fault Act, persons who suffer injury as a result of a motor vehicle accident have two separate and distinct claims.

The first claim is for certain economic benefits. This claim is known as the first-party claim. The first-party claim is payable without regard to who was at fault for the accident and is generally against the injured party’s own insurance carrier. The available benefits include allowable expenses, wage loss, replacement services, and where the accident results in death, survivors’ loss benefits. These benefits are called “personal protection insurance benefits.” Other common references are “PIP benefits,” “no-fault benefits,” or “first-party benefits.”

The second claim is the liability claim against the negligent driver or owner. This claim is known as the third-party claim. The third-party claim is limited by the No-Fault Act. The Act provides that in order for the injured person to maintain a suit against the negligent driver or owner for non-economic damages (pain and suffering), the injury must meet the threshold of a serious impairment of body function; permanent serious disfigurement; or death. MCL 500.3135(1). If the injury does not rise to the level of the no-fault threshold, the injured party’s claim for non-economic damages is barred.

The application of the threshold of a serious impairment of body function is one of the most controversial and litigated areas of no-fault law. The statute defines a serious impairment of body function as “an objectively manifested impairment of an important body function that affects the person’s general ability to lead his or her normal life.” MCL 500.3135(7).

Since the inception of the Act in 1973, the law on the subject has taken many courses. One of the most controversial changes in the law was the 2004 Supreme Court decision of Kreiner v Fischer, which essentially expanded the requirements of the serious impairment threshold. In determining whether an injury meets the threshold, the Kreiner case set forth a multi-level test for the courts to follow. This is often referred to as “the Kreiner standard.” One of the added requirements of the Kreiner standard is that the injury must now affect “the course or trajectory of the plaintiff’s normal life.”

Kreiner has been criticized for going beyond the plain meaning of the statute. However, at least for now, it remains the law. The application of Kreiner has lead to many unfair and unjust results. Choosing an attorney who specializes in no-fault law and is familiar with the current state of the law is essential to protecting your rights. The Hohauser Law Firm has the knowledge, experience and expertise to handle your case.