Frank is heading down a busy street in Ann Arbor when another driver pulls out of a driveway and hits Frank's car. They pull over, and the other driver tells Frank that Frank was driving pretty fast and that, if Frank had been more attentive, he would have been able to stop in time. Frank denies driving too fast, but he doesn't want to get into an argument at the scene of the car accident.
The police come, but Frank declines an ambulance, even though he felt immediate neck pain as soon as the collision occurred.
Frank goes to the ER later that day, and is told to rest and to see his family doctor. He goes to the doctor, who diagnoses neck strain, and tells Frank to rest for a week. Three weeks later, Frank is no better, and so he tries chiropractic and physical therapy. The chiropractor confirms the diagnosis of neck strain, but says that it is a severe strain, and will take some time to improve. Finally, after five months of regular chiropractic adjustments and physical therapy, Frank feels back to normal. Frank is a delivery driver who missed one month of work due to the accident.
The first thing Frank needs to do is report the accident to his car insurance company, and make sure he's in compliance with Michigan laws when it comes to a driver's legal obligations after a car accident. Learn more: Do I need to report a car accident in Michigan?
Since law enforcement came to the scene, Frank should also be sure to get any copy of the police report that was generated in connection with the accident.
Even though Michigan is a no-fault car insurance state, Frank needs to be aware of Michigan’s statute of limitations, which is a law that sets a deadline for filing a lawsuit. In Michigan, the statute of limitations for car accident lawsuits is three years.
Why is this law so important? If your injuries are serious enough that Michigan’s no-fault insurance system permits you to make a claim against the driver who caused the accident, but you don’t file a lawsuit within the time period set by the statute of limitations, your case is over unless you fall within one of the very limited exceptions that might stop the clock. (Learn more about Car Accidents and the Lawsuit Process.)
If Frank’s injuries are serious enough to permit him to file a lawsuit against the other driver (rather than simply making a no-fault claim under his own insurance coverage), he needs to be aware of Michigan’s rules of comparative negligence. Even at the scene, the other driver was already claiming that Frank was negligent.
Michigan has what is called a “modified comparative fault” rule. Under this rule, your total damages award is reduced by whatever percentage of the “fault” the judge or jury believes is yours. This means if you are found to be in part negligent with respect to your injury, your award of damages is diminished in proportion to your fault,up to a certain point. If, for example, you were awarded $300,000 in damages, but were found 25% at fault, your damages would be reduced to $225,000. However, if you were found to be 50% or more at fault, you would receive no damages whatsoever.
In order to maximize your potential recovery, whether you go to trial or just settle the case with the defendant’s adjuster, you want to make absolutely sure that the adjuster knows that you did nothing wrong. (Learn more about Proving Fault for a Car Accident.)
Michigan’s no-fault system means you typically need to handle any claim under the terms of your own no-fault coverage. You can’t ordinarily make a claim against the other driver unless your injuries and medical treatment exceed the minimum limits of the no-fault law.
Michigan no-fault coverage includes Personal Injury Protection (PIP) benefits, which pay most or all of the insured's injury-related costs. The maximum amount of these benefits is $4,929 per month. No-fault insurance also covers up to $1,000,000 in property damage.
In Frank’s case, the other driver was not a Michigan resident, which allows him to avoid Michigan’s no-fault law and make a liability claim against that driver. His out-of-pocket (compensatory) damages total $15,500. The breakdown looks like this:
Frank and his attorney decide that another $35,000 in damages is appropriate to compensate for Frank’s pain and suffering in connection with the accident, and they make an initial demand of $65,000 to settle the claim. After negotiating with the insurance adjuster, Frank accepts a final settlement of $27,500.
As mentioned above, you want to settle your claim or file a lawsuit (or at least turn the case over to a lawyer) well before the three-year time limit set by Michigan's statute of limitations expires. But you also don’t want to settle it too early -- meaning before you are either fully recovered or are as good as you are going to get. This is known as reaching "maximum medical improvement" or MMI. In Frank’s case, he was at MMI, and so he was ready to settle.
Learn more about Settling a Car Accident Case.