Overview of New Changes to Michigan Auto Accident Law
Generally speaking, under Michigan law, two sets of rights flow from any automobile accident.
The one that most people think of, is the right to sue the son of a gun who rear-ended you, or blue the stop sign, or did something else stupid cars to crash. We call those “third-party”, or negligence cases, because we are suing a third-party whose negligence caused the crash.
The other one is the right to have expenses paid by our own automobile insurance carriers, for medical expenses, weight loss, and certain other modest cash benefits. These are referred to as “first party” or “no-fault” claims, and those are discussed elsewhere on this website.
We are going to discuss here, some of the changes made to third-party negligence auto claims.
Changes In The Injury Threshold
In my view, there were three major changes to the third-party negligence auto lawsuits. The first deals with the so-called “injury threshold”.
Since 1973, motorists have not had an unlimited right to sue, as result of a motor vehicle accident. The motorist had to meet the injury threshold, either by showing that a death or physical scarring occurred, or by showing that a “serious impairment” injury occurred. As you can appreciate, most of the cases fall within this third category, that being “serious impairment”.
The law dealing with threshold cases involving death or physical scarring did not change much in the recent revisions. However, the law dealing with “serious impairment”, where most of the cases occur, did change, in a significant way.
For a few years, in the 1990s and early 2000’s, the serious impairment injury threshold was restricted so severely, that making a claim for an auto accident was extremely difficult. Indeed, represented a woman at the time who had a shattered pelvis, but who received excellent medical care, and made as quick a recovery as one could make under the circumstances.
Despite injuries that prevented her from going up and down stairs, in doing the normal things that we all do, the insurance company (State Farm) filed a motion with the court saying that under the then-existing law , she was not injured badly enough. While State Farm did not win their motion, the effect of the horribly restrictive threshold roles, was that injury cases were simply worth less money. That is because the lawyers negotiating, on both sides of an injury case leverage the expected value they can get from a jury.
That began to resolve somewhat in 2010, in the case of McCormick v Carrier, 487 Mich 180 (2010), which basically held that there is no minimum or maximum time requirement, for how long an auto accident -related impairment must last, holding that it is an inherently fact-based analysis, requiring a comparison of the injured person’s life before vs after the accident.
Significantly, for people who have been injured in automobile accidents, this new more liberal rule in the McCormick case was put into statutory form in 2019. In turn, that will make it more difficult for a future, more insurance company-oriented state Supreme Court to “interpret” these protections out of Michigan law
Higher Minimum Insurance Policy Limits
The second deals with new rules regarding minimum automobile insurance limits. Under the old law, the minimum limits were “20/40”, which means that an insurance company would be liable for no more than $20,000 to anyone injured person, or $40,000 per accident, if their insured had a “20/40” policy. Conceivably, a negligent driver could have injured or killed, e.g., five persons at a time, and the most there would be paid under the policy would be $40,000. I know this from painful experience, because I represented one of the injury claimants in just such a situation. It was horrendous.
For auto insurance policies issued on or after July 2, 2020, Michigan law sets forth a new “default” limit of “250/500”, although the State of Michigan website indicates that drivers may have the option of purchasing limits as low as “50/100”, meaning $50,000 payable to any one person, or a maximum of $100,000 payable per accident. It is unclear to me why they indicate that the new default limits are “250/500”, when there is effectively a huge loophole enabling drivers to buy limits as low as “50/100”
Remember that these limits are designed to protect your assets against claims by other persons. Therefore it might be worth a few extra dollars to buy a higher “minimum limit” insurance policy, in order to protect your assets.
As well, insurance companies typically will not allow you to purchase uninsured/underinsured (UM/UIM) insurance with limits higher than your bodily injury limits. UM/UIM policies are the ones that will protect you and your loved ones, in the event of an accident with an uninsured/UIM. For example, if you have only a “50/100” policy, your insurance company will probably not allow you to purchase from them a policy with higher limits, e.g., a “100/300”, or something higher.
One thing to keep in mind is that insurance is at least supposed to be priced in terms of the cost of the risk to the insurance company. The higher one goes in terms of dollar damages, the less frequent are the claims, meaning that the lower “minimum limit” insurance policies will be more expensive on a “dollars per thousand” basis, then would a policy with higher limits. It makes sense, because there are simply more claims paid at lower dollar levels.
Ability to Sue For Excess Medical Damages
Changes to Michigan’s first party no-fault law, by which injury victims look to their own insurance company for payment of their medical and other expenses, now make some of those medical and other expenses collectible in lawsuits against negligent drivers.
Formerly, everyone in Michigan had a standard package of medical benefits, there were unlimited as to time or dollar amount. Because they were unlimited, there was therefore no “excess” to sue for, in the context of a third-party auto negligence suit. Now there may well be.
I recommend that everyone opt for the quote unlimited” no-fault medical insurance. While it may cost a few dollars more, it is the simplest and best way to provide for access to the broad range of medical services you may well need, in the event of an auto accident.
However, if you have chosen a no-fault plan, with a limited, or if you are forced into such a plan by virtue of being an uninsured passenger/uninsured pedestrian, the issue of “excess medical” may be something we have to think about.
I currently have a client, Kenny (not his real name) who was an uninsured pedestrian, and therefore was forced into the State of Michigan Assigned Claims Plan, with a $250,000.00 cap on medical coverage. He was struck in an intersection, and sustained very serious skull fractures, multiple hand fractures etc., resulting in a hospital stay in excess of 12 days. The hospital bill alone might well be at or near that $250,000 figure, and of course, he will have post hospitalization follow-up with his doctors, the $250,000 limit. In Kenny’s case (again, not his real name), we will be suing for excess medical damages, is the revisions to the no-fault law now allow.
In short, there is no such thing as a “simple automobile accident case”, at least not here in Michigan. If you need help with your automobile accident, give me a call, Jon Frank at 586-727-1900.