No-Fault Explained: Out-of-State Tort Claims

Michigan’s no-fault act applies even when the accident doesn’t happen in the state. Not every state has the same rules to allow injured motorists to collect damages after an auto accident. That’s why Michigan has separate rules for states that still apply liability-based “tort” law to their auto accident claims.

If a Michigan resident who has a no-fault policy is injured out of state, MCL 500.3116 explains who gets paid.

No-Fault Benefits for Out-of-State Accidents

A Michigan resident doesn’t leave her insurance benefits at the state line. If she is injured in an out-of-state accident, she can still submit a claim to her auto insurance provider for her medical expenses, work loss, and attendant care costs.

Insurance providers have time limits that require them to pay benefits or contest claims long before a tort liability case would conclude. That means sometimes a person will receive no-fault benefits and then later be awarded damages in the tort lawsuit.

Repaying Tort Damages

Michigan doesn’t allow an injured motorists to collect twice for the same injury. If an insurance company pays benefits that are later collected from a “tortfeaser” – a defendant in an injury liability case – it is up to the injured party or his attorney to repay the insurance provider for its benefits. Until he does, the insurance company will have a lien on the damage award. That means the insurance company can seize assets from the injured party until the benefits are repaid.

Why Bother Filing the Tort Lawsuit?

If you will have to repay your insurance provider’s no-fault benefits, you may wonder why would you file the out-of-state tort lawsuit in the first place. A traditional tort action involves a broader range of damages than your no-fault policy. You may be able to collect non-economic damages including pain and suffering, permanent wage loss and disability, replacement services and loss of companionship.

If you win your out-of-state tort lawsuit, you only have to repay those parts of your award that the insurance provider has already paid you. All of those non-economic damages stay in your pocket to compensate you for the emotional and intangible losses you suffered because of the auto accident.

If you are facing a Michigan no-fault insurance claim for an out-of-state accident, you will need experienced auto accident attorneys in both states to coordinate your claims and make sure your benefits are paid and repaid quickly. The attorneys at Christensen Law can be your local counsel and make sure your Michigan no-fault claim is handled properly.