Michigan No-Fault insurance law is in place to provide prompt payment of medical insurance benefits for people who are hurt in a car accident. MCL 500.3142 requires PIP insurers to pay No-Fault benefits within 30 days of receiving reasonable proof of the fact and amount of the loss sustained. If an insurer fails to pay PIP benefits within the 30 day time period set forth in the statute, it is liable to pay 12% No-Fault penalty interest also, on top of the insurance benefits. See MCL 500.3142(2). The penalty interest provision in MCL 500.3142(2) is intended to penalize an insurer that unreasonably delays in paying a claim. See, e.g., Williams v AAA Michigan, 250 Mich App 249, 265 (2002).
In a recent decision, the Michigan Court of Appeals ruled that a PIP insurer is liable to pay attorney’s fees for taking a frivolous position in violation of MCL 600.2591, where a No Fault insurer argued that it had no obligation to pay PIP insurance benefits plus 12% penalty interest to a car accident victim, until it completed its own investigation regarding the person’s “eligibility” for PIP benefits, even though the Michigan Assigned Claim Facility had already determined that the claimant was “eligible” and “reasonable proof of the fact and amount of the loss” had been provided to the insurer pursuant to MCL 500.3142. The published Michigan Court of Appeals case of Bronson Health Care Group Inc v Titan Insurance Co and State Farm Mutual Automobile Insurance Co, (Court of Appeals Case No.: 324847) was decided on March 15, 2016. The insurer has filed an application for leave to appeal with the Michigan Supreme Court as of June 2, 2016, which has not been decided yet.
Read more about our expertise in car accident law and No Fault insurance.
Car Accident Law NO FAULT INSURANCEAbout the Author
