First-Party Claims

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First-Party No-Fault Claims

In a first-party claim, an accident victim can bring a direct claim against the responsible no-fault insurer (typically the party’s own insurance company) for economic losses for “accidental bodily injury arising out of the ownership, operation, maintenance or use of a motor vehicle as a motor vehicle.” MCL § 500.3105(1). The responsible insurer is required to pay no-fault first-party benefits to the claimant even if the claimant is totally at fault in causing the accident. A first-party claim is based in contract law as opposed to tort law.

A claimant must file an action or provide written notice of the claim to the insurer within one year after the accident. If written notice is provided, the claimant can present the claim any time thereafter except the claimant may only seek benefits for expenses incurred within one year before filing suit.

The remedies available under the No-Fault Act are “all reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person’s care, recovery, or rehabilitation.” MCL § 500.3107(1)(a). This commonly includes reimbursement of medical expenses, wage loss, and replacement services (e.g. household and other chores that the insured would have done but for the accident). Other available benefits may include home modifications, customized vehicles, attendant care, room and board, vocational rehabilitation, mileage expenses, prescription charges, and anything else as long as the expenses are related to the insured’s care, recovery, or rehabilitation and the expenses are reasonable.

Claims for certain benefits are limited in amount and duration. For example, wage-loss benefits are recoverable for 85 percent of what the insured would have grossed but for the accident. These benefits are payable for three years after the date of the accident. A no-fault insurer may be entitled to a set-off for expenses that are covered by other governmental benefits such as Medicare, Medicaid, Social Security, or worker’s compensation.