Michigan PIP: Medical Bills and Lost Wages

Can a Michigan third-party claim recover medical bills or lost wages that PIP does not?

Yes. Michigan law may allow a third-party claim for certain crash-related medical expenses or lost income beyond applicable personal injury protection (PIP) limits. A third-party claim seeks payment from the person or company legally responsible for the crash.

You must show that another party was legally responsible and that the crash caused the claimed loss. Insurance coverage also affects how much money may be available to pay the claim.

What counts as excess economic loss after a Michigan car accident?

Excess economic loss is the legal term for certain medical expenses, lost income, or survivor's loss beyond applicable PIP limits. Survivor's loss refers to certain financial support that a deceased person's dependents lose after a fatal crash. MCL 500.3135(3)(c) covers qualifying allowable expenses, work loss, and survivor's loss, including certain future losses. Fatal-crash claims require a separate analysis.

PIP is first-party coverage. This means benefits come from the insurer responsible for paying PIP under the policy and Michigan law. PIP generally pays benefits without regard to who caused the crash.

A third-party claim is separate. It depends on another person's legal responsibility for the crash. An expense does not become recoverable from the responsible party merely because PIP did not pay it.

Not every PIP benefit can be recovered through a third-party claim. For example, PIP replacement-services benefits may cover the cost of help with household tasks an injured person can no longer perform. The Michigan Supreme Court held in Johnson v Recca that these expenses are not recoverable as excess economic loss under MCL 500.3135(3)(c).

What medical expenses might not be covered by PIP?

Some crash-related medical expenses may support a third-party claim when they exceed an applicable PIP medical limit. MCL 500.3135(3)(c) also addresses certain situations involving a PIP medical opt-out or exclusion.

Which PIP limit applies depends on the policy, valid coverage selections, household facts, and other coverage rules. MCL 500.3107c permits selected limits for PIP medical expenses. Michigan Legal Center's guide to who pays medical bills after a Michigan car accident explains the separate issue of which insurer must pay PIP benefits first.

A PIP denial, reduction, or cutoff does not prove that an expense exceeds the applicable limit. It may instead raise a separate dispute over PIP benefits. The policy, denial letter, payment history, and reason for nonpayment all matter.

A medical bill is not automatically an allowable expense. Under MCL 500.3107, allowable expenses are reasonable charges for reasonably necessary products, services, or accommodations for an injured person's care, recovery, or rehabilitation. The care must also be connected to the crash and supported by evidence.

Future medical expenses may also qualify as excess economic loss under MCL 500.3135(3)(c). The claim needs medical support showing what care is reasonably expected and how it relates to the crash.

What lost income or future work loss might not be covered by PIP?

A third-party claim may seek qualifying work loss above the monthly PIP maximum or beyond PIP's three-year benefit period. MCL 500.3135(3)(c) also includes future work loss.

PIP work loss covers income the injured person would have earned during the first three years after the crash. That three-year period defines the PIP benefit period. It is not a universal deadline for giving notice or filing a lawsuit.

PIP and third-party income-loss claims also use different tax rules. MCL 500.3107 applies a 15% PIP adjustment unless reasonable proof supports a lower tax advantage. MCL 500.3135(3)(c) separately reduces third-party income-loss damages by the taxes that would have been paid on that income.

Recovery for future work loss is not automatic. Evidence must show the expected work, earnings, medical restrictions, and connection to the crash. The proof may differ for an employee, a worker paid on commission, or a self-employed person. Michigan Legal Center's guide to Michigan No-Fault wage loss explains the separate PIP benefit and its calculation, proof, and timing rules.

What deadlines apply to PIP benefits and a third-party claim?

PIP and third-party claims have different deadlines, and waiting can put both at risk. Under MCL 500.3145, a lawsuit for PIP benefits generally must begin within one year after the crash. Different timing may apply if the insurer received written notice within one year or previously paid PIP benefits.

Even then, separate filing, tolling, and one-year-back rules can limit when you may sue and which unpaid benefits you may recover. A third-party injury claim generally must be filed within three years after the injury under MCL 600.5805(2).

Other claims and insurance policies may have different notice requirements or deadlines. Have the dates and facts reviewed promptly.

What records help prove excess medical expenses or lost income?

The best records show the available PIP coverage, payments already made, and the losses caused by the crash. Gather the documents you already have, including:

Auto policy declarations, PIP selection forms, and the full policy, if available.
Explanations of benefits and records of PIP payments, denials, reductions, cutoffs, or limit exhaustion.
Itemized medical bills, medical records, doctor-imposed restrictions, and support for expected future care.
Employer letters, pay stubs, tax records, work schedules, commission records, contracts, or appropriate self-employment records.
Crash photos and videos, witness names, messages, and the police report.
Notices about prior payments, liens, repayment claims, liability coverage, or uninsured or underinsured motorist coverage.
Any proposed settlement agreement or release.

This is a gathering list, not a claim formula or complete submission checklist. Crash video can be overwritten. Messages may be deleted, and witnesses can become harder to find.

Which records you need depends on the policies and losses involved. Preserve what you have and ask which additional records may be needed.

How is excess economic loss different from pain and suffering?

Excess economic loss and pain and suffering are separate types of damages. Excess economic loss concerns specific financial losses, such as qualifying medical expenses and lost income.

Pain and suffering is a noneconomic loss. Under MCL 500.3135(1), a person may recover noneconomic damages only for death, serious impairment of body function, or permanent serious disfigurement.

That noneconomic threshold does not control a qualifying excess-economic-loss claim. Liability, crash causation, proof, available insurance, and defenses still matter.

What else can limit an excess-economic-loss claim?

Fault and prior payments can reduce the claim. Insurance coverage and release terms can separately affect recovery.

A duty to limit avoidable losses may apply. Canty v Mason addressed that duty in a Medicare opt-out case. The required steps can depend on available medical coverage and whether a provider accepts it.
Comparative fault reduces economic damages by the injured person's percentage of fault. Under MCL 600.2959, noneconomic damages are not awarded if that person's fault is greater than the combined fault of everyone else.
Prior payments can reduce what remains in dispute. Keep benefit statements and notices about liens or repayment claims.
Liability limits and uninsured or underinsured motorist coverage can affect the insurance available. Policy limits do not decide the legal amount of the loss.
A release may affect claims beyond the payment being offered. Review the policies, payment records, medical and income proof, liability evidence, and release language before signing.

Michigan Legal Center's car accident attorneys can review the unpaid losses, coverage, deadlines, and evidence. Contact Michigan Legal Center to discuss the facts.