NO-FAULT PRESENTATIONProtecting Your Clients Interests – David Pontes

Quid Pro Quo Bargain of No-Fault Economic benefits from own insurance

company while granting immunity to negligent driver unless serious injury, death or disfigurement

Desirable to guarantee economic benefits for all accident victims, even the negligent

Preserves the right for seriously injured to recover non-economic damages

The Statistics - 2014

In 2014 there were 298,699 motor vehicle accidents in Michigan

876 people died as a result of motor vehicle accidents in Michigan

71,378 were injured as a result of motor vehicle accidents in Michigan, an average of 195 people per day injured

In Macomb County alone, there were 24,471 motor vehicle accidents, 44 of which were fatal and 6,892 of which people were injured in motor vehicle accidents

Driving a car is the most dangerous activity we all do on a daily basis – we get into a 4,000 pound vehicle and drive 50 miles an hour a couple of feet away from another 4,000 pound vehicle traveling at 50 miles an hour in the opposite direction

Automobile Liability Insurance – Mandatory Coverage

Bodily Injury – Injury to other driver/passenger in MVA – Statutory minimum is $20,000 per individual/40,000 per accident to cover for non-economic (pain & suffering) and excess economic damages If your client is in a motor vehicle accident and is the at-

fault for the accident this is the coverage for injuries to other party

Only comes into play if victim dies, is permanently disfigured or serious impairment of important body function

As soon as this coverage is exhausted, at-fault clients assets come into play

Property Damage – Coverage for property damage outside the State of Michigan, i.e. damage to another vehicle or property – Statutory minimum $10,000

Personal Injury Protection Benefits – Mandatory Coverage

– Medical Expenses – Medical mileage, attendant care, transportation, medical bills, prescription bills, durable medical supplies• Uncoordinated – All reasonable and necessary medical

expenses as a result of the motor vehicle accident are paid by no-fault carrier first

• Coordinated – Medical expenses are first paid by health insurance carrier, excess expenses like co-pays and medical mileage are covered by no-fault carrier

– ERISA – Regardless of coordination, no-fault carrier first in priority to pay medical expenses

– Up to three years of replacement household services– Up to three years of wage loss benefits paid at 85% up

to $5,392 per month– Michigan Catastrophic Claims Association – Is a private

non-profit set up for the most severely injured accident victims – All Michigan No-Fault Insurance Policies are required to pay a fee into the CAT fund

Coordinated vs Non-Coordinated A typical cost saving strategy for an insurance agent is to sell a coordinated no-

fault insurance policy with medical insurance coverage. In many instances, even where there is no health insurance, no-fault insurance agents will still sell a coordinated policy as it is cheaper.

Insurance agents typically sell clients on the cheapest coverages and many times don’t know or understand the intricacies of what they are selling and never check the medical insurance.

Subrogation is the right for an insurer to pursue a third party that caused an insurance loss to the insured. This is done as a means of recovering the amount of the claim paid to the insured for the loss.

Most medical insurance policies have a subrogation clause which indicates that if you recover money as a result of another's negligence and the medical insurance has paid for the treatment of those injuries, the insurance has a right to recover the money it spent on the medical treatment

Example: A driver with a coordinated no-fault policy is in a motor vehicle accident and suffered

injuries typically valued at $100,000 for pain & suffering, he is taken to Beaumont and receives MRIs and multiple surgeries costing $50,000.

The driver that hit him has a $100,000 3rd party bodily injury policy. The insurance company tenders the full policy limits to the injured driver. BCBS comes in and takes back the $50,000 it spent on medical treatment, leaving client

$50,000 short in compensation for his injuries.

Property Protection Insurance – Mandatory Coverage Damage to property in Michigan, outside

of motor vehicle accidents – Statutory minimum $1,000,000

Collision Protection – Optional coverage Important to maintain because unable to

recover from at-fault driver for damage to your own vehicle except for Mini-tort Broad form – Pays for the damage to

vehicle regardless of fault, deductible waived if other driver at fault

Standard Collision Coverage – Pays for the damage to vehicle regardless of fault, deductible is always paid regardless of fault

Uninsured Motorist Coverage – Optional coverage To insure that if you are in a motor vehicle

accident with an uninsured individual, able to recover for bodily injury from your own insurance company.

According to the Insurance Research Council, on a nationwide basis, 13% of drivers are uninsured. That’s about 1 in 7 drivers.

Estimated that 50% of vehicles in Detroit are uninsured.

Contractual coverage with your insurance company, meaning that contractual terms in the policy, such as a cooperation and 30 day notice provision may be enforced

Underinsured Motorist Coverage – Optional coverage To insure that if you are in a Motor

Vehicle Accident with an individual with a inadequate insurance policy, able to recover for bodily injury from your own insurance company.

Acts as a set-off of any recovery from other driver, i.e., at fault driver has $20,000 statutory liability minimum, able to recover $80,000 on a $100,000 underinsured motorist policy

Doctor and Nurse

The above insurance polices are in the same household.

Doctor husband has coverage for uninsured and underinsured motorist coverage.

Nurse wife only has uninsured, not underinsured motorist coverage.

Wife is in a motor vehicle accident with an individual with minimum coverage, i.e. $20,000 for bodily injury coverage.

Wife undergoes cervical fusion surgery and shoulder arthroscopy, valued well in excess of $100,000, but is only able to recover $20,000 from the at-fault driver.

At a minimum, all policies of insurance in a household should maintain uniform uninsured/underinsured and coverage of $100,000 or more.

Umbrella Insurance Personal umbrella liability is designed to protect against the

financial devastation and hardship that can result from a personal liability lawsuit. It goes beyond the liability coverage typically provided by your auto insurance company with higher amounts of coverage – usually sold with limits of $1 million to $5 million.

If you purchase an umbrella policy either through your current auto insurance company or through an umbrella insurer, you must make sure that it includes Uninsured (UM) and Underinsured (UIM) Motorist coverages. Not all umbrella insurance companies even offer such coverage and many expressly exclude injuries sustained in a motor vehicle accident.

You will be required to carry a minimum level of UM and UIM on your regular auto, homeowners, business policies, etc., before they will give you the umbrella coverage.

Client cannot just assume that they are going to be covered by obtaining umbrella insurance coverage, which is generally a lot cheaper than no-fault coverage, when they are in a motor vehicle accident.

If the Declaration Page for the umbrella policy does not include UM and/or UIM coverages, that means you do not have them.

Older Couple

Older couple have a troubled adult son, drug and alcohol abuse, with seven operating while intoxicated/under the influence of drugs crimes.

Couple helps son get his drivers license back and purchase a car for him, titled in couple’s name.

Son, while high, crosses center line and hits my clients, catastrophically injuring both, wife lost right leg, 85% of her sight, suffered a closed head injury, and titanium replacement of all bones in remaining leg.

Older couple is liable as the owner of the motor vehicle under the owners liability statute, negligent entrustment and respondeat superior.

Insurance company offers full policy of $200,000. Son commits suicide on Mother’s Day. Due to the severity of the injuries we sought the assets of the older

couple. Of approximately $835,000 in assets, including a restaurant and home,

we settled for $530,000 of their assets plus the $200,000 from the insurance company.

Mini-Tort Coverage

Under Michigan’s mini tort law, victims of car accidents can recover a maximum of $1,000 for vehicle damage from the driver who caused the crash, via his automobile insurance company. This is called a mini-tort claim.

Mini-tort only covers vehicle damage. Michigan’s mini-tort law is not designed to pay for all of

your vehicle damage. The purpose is to compensate a person involved in a car accident that was not at-fault for out-of-pocket expenses resulting from the collision. Michigan’s mini-tort law is premised upon people being free to purchase their own collision coverage. If an individual has existing collision coverage, the full vehicle repair costs from the accident will be paid from that policy. However, even if someone has collision coverage, he can still make a mini-tort claim for incidental, out-of-pocket expenses such as a deductible.

Extras and Take Away Add-ons – Death, dismemberment and loss of sight policies, rental

protection, and towing. Comprehensive coverage – This will cover damages to your car that do not

come from car accidents, such as collisions with animals, theft, fire, flooding, etc.

I once represented an 82 year old woman who was walking into Macomb Mall when she was run over once, when the young driver (a painter from Eastpointe with no assets) felt something, he put the SUV in reverse and ran her over again. The driver had a 20/40 policy, the lady had no underinsured motorist coverage, but did have uninsured motorist coverage of $100,000. Unable to ever walk again, she looked at me as I handed over her settlement check of about $13,332 (20k – my 1/3 fee) and asked about all the people on TV commercials (Bernstein, Fieger, etc.) making millions on the injuries sustained in car accidents.

If you are in a car accident with Donald Trump or Walmart, none of what we have been talking about matters, since they have assets and most likely insurance to cover any damages you may incur, but if you are in a car accident with a painter from Eastpointe without a pot to shave in you are out of luck.

What I failed to tell that woman that day was that she could have easily protected herself by adequately insuring herself.

Conclusion