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No-Fault Insurance
Wayne State University Law School
Miller, Wayne J.

No-Fault- Miller- Fall 2013

I. Introduction

a. History- only can sue proof of negligence

i. Included all damages economic, noneconomic

ii. After 1973 they bifrocated

b. Contract and tort

i. No fault- contract

ii. Third party-tort

c. Statutory Construction

i. Textualism

1. Looking at text- like dictionary definition- don’t care about intent rather what they said is what they intended

ii. Hoop analysis

1. You have to go through hoops to get to no fault

a. Mandatory insurance

b. Coverage entitlement

c. Disqualifications

d. Benefits

e. COB coordination of benefits

f. Litigation

iii. Consumer issues

1. Mandatory coverages

a. PPI

b. Residual liability

c. PIP

2. Optional coverages

a. Collision/comprehensive

i. Collision Protect your car from damage in car crash

1. Advice raise deductabile

ii. Comprehensive- theft, arson, tree falls, anything other than car accidents

b. Uninsured/ underinsured motorist coverage

i. Underinsured is the most important to have and with high limits


d. Gurantees economic losses regardless of fault

e. Limits right to bring tort liability claims for non-economic losses

i. Has to meet the tort threshold for injury

f. Whats wrong with fault systems

i. Only compensates non-negligent drivers

1. Places burden on government or other forms of insurance

ii. Tort system too slow in compensating victims

1. b/c first you have to establish that someone is at fault

iii. Over compensates minor injuries, under compensates catastrophic injuries (like if defendant has little insurance)

iv. Tort system is not cost effective

1. Pay for litigation instead of paying benefits and reducing premiums

v. System gets flooded since there is no threshold limiting lawsuits

vi. Person who hit you might not have any money or insurance

II. No- fault

a. Pure no fault

i. All tort liability is elimated- No state has ever adopted such kind

b. Modified no fault

i. Guaranteed amount of economic damages

ii. Imposes threshold injury requirement

1. Dollar threshold

a. Injured person must incur a certain amount of medical expenses and wage loss

2. Verbal threshold

a. Verbal concepts define severity of injury- MICHIGAN

c. Add on no fault

i. Option to add on to your insurance for higher premium, guranatees some economic damages

ii. Retains full ability to pursue tort claim but not for economic damages recovered by add on coverage

d. Michigan No Fault

i. Compulsory insurance system

1. Must buy no fault insurance

ii. Personal Protection insurance (PIP) benefits

1. Allowable expenses

a. 3107(1)(a)- all reasonable charges incurred for reasonably necessary products, services, and accommodations for an injured person’s care, recovery, or rehabilitation

i. Payable for life and without dollar limitation

ii. Includes, medical expenses, in-home nursing (attendant care), residential accomodations, physical as well as vocational rehab, special motor vehicular transportation, medical transportation mileage, guardianship expenses

iii. Attendant care

1. 10 -12 dollars an hour for unskilled person

2. Work loss

a. 3107(1)(b)- max three years

b. 85% of gross pay including overtime- monthly maximum currently $4700.00 (5 thousand)

c. Temporarily unemployed can collect

3. Replacement service

fault benefits at 250k, rejected

ii. Proposal c

1. To cap at 1 mil and restrict to sue for noneconomic

iii. 1995 PA 222-

1. To be discussed later- tort reform

iv. Present-

1. High cost of auto insurance in urban areas

v. 2011- house bill 4936;PIP “Choice”

1. Bills that are up this fall

III. Mandatory insurance requirement 3101(1)

a. Vehicles

i. Vehicles required to be registered in Michigan

1. MCL 257.1 et seq

a. MCL 257.216 Basically all vehicles that move on highway except

i. Certain vehicles relating to manufacturing and transporting MV

ii. Crossing highway from one property to next

iii. Certain implements of husbandry (farming)

iv. Special mobile equipment

v. Overhead trolley vehicles

vi. Owned by united states

vii. Certain trailors weighing less than 2500 pounds

viii. Being driven only for purposes of obtaining inspections or weighing receipts

ix. Car dealer owned

b. MCL 257.217 Every person who has to register must make application to secretary of state for registration and title

c. MCL 257.233,234,237- Owner or buyer can retain plates transfer to new vehicle,

i. if no application is made within 15 days, goes back to secretary of states

ii. signing of title is when transfer happens even before delivery to secretarty of state (Perry v Golling Chrysler Plymouth Jeep inc.)