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No Fault Explained: Excluded Claimants

The Michigan No-Fault Insurance Act was designed to make sure that no one who is hurt in an auto accident has to struggle to pay for their medical expenses. While the law creates many ways for injured motorists to get benefits, it doesn’t cover everybody. There are some people who are “excluded claimants” under the law.

In many ways, excluded claimants are people who have taken advantage of Michigan’s no-fault insurance system. Most exclusions are based on a motorist’s failure to comply with Michigan law. MCL 500.3113 creates four types of excluded claimants who are not allowed to file claims for no fault benefits after an accident.

Car Thieves

If a person has taken the vehicle he is using illegally, he is an excluded claimant and cannot seek no-fault benefits. This exclusion includes car thieves, as well as anyone who uses another person’s vehicle without permission. In some cases, children have even been excluded for sneaking out and using their parents’ cars.

Uninsured Vehicles

If someone owns a car, or it is registered in her name, Michigan law requires her to carry no-fault auto insurance. If she doesn’t, she is an excluded claimant and can’t get any benefit from the system. This exclusion affects over fifty percent of Detroit drivers, who often drive without state-required auto insurance.

Non-Residents

Visitors to the State of Michigan run a risk of being excluded from the state’s no fault insurance benefits. Whether an out-of-state driver is an excluded claimant depends on if he has auto insurance with a company that also does business in Michigan. If a non-resident uses a small insurance provider or does not carry auto insurance, he may not be able to have his medical expenses covered under Michigan law.

Excluded Operators

Michigan law allows insurance companies to write contracts that explicitly exclude particular drivers. If a person has a poor driving record or a history of accidents, her relatives may have to list her as an “excluded operator” before the family can get no-fault auto insurance coverage. Once an insurance provider lists a person as an “excluded operator,” she may not seek First-Party benefits for using that vehicle.

Most claimants become excluded because they are driving vehicles in violation of Michigan law. The rest, the non-residents, are excluded because they never bought into the Michigan no-fault system in the first place. With those few exclusions, every Michigan resident can receive no-fault benefits following an auto accident.