Michigan’s No-Fault Law: Work Loss Benefits

Michigan’s No-Fault Law: Work Loss Benefits

Posted on:
December 15, 2015
Personal Injury
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Burton Auto Accident Attorney

Michigan’s no-fault auto accident law provides for four types of benefits for victims: allowable expense benefits, replacement service expenses, survivor’s loss benefits, and work loss benefits. Work loss benefits are defined as compensation for the loss of income that an injured person would have earned after the accident occurred, if he or she had not been injured. If you have suffered injuries in a car accident, you should call a personal injury attorney today to discuss compensation for your injuries.

Work Loss Benefits

One of the most important benefits provided by Michigan’s no-fault auto insurance law is payment for lost wages. Essentially, this means that in the event that someone is injured in an automobile accident, he or she can recover the amount of money that would have been earned had the victim been uninjured. The maximum amount that can be recovered is set by statute and is adjusted annually to reflect any changes in the cost of living.

Calculating Work Loss

Michigan’s Insurance Code states that the maximum amount to be paid for work loss should be based on the injured person’s gross income, after taxes. Because of this limitation, the victim of a car accident will receive only 85% of the wages the victim would have earned, had he or she not been injured. Because the calculation only accounts for non-taxable income, the formula does not take into account pensions, health insurance, or other outside contributions to income.

Under the new guidelines, the maximum amount that a policy holder can receive is $70,000 annually. Because the amount is capped, if an individual makes more than $70,000 a year, he or she will need to seek the difference owed by filing a lawsuit for “excess economic loss damages” against the driver who caused the crash. Michigan law further provides that eligible individuals can collect work loss benefits for a maximum of three years.

Recent Modification

According to a bulletin recently published by the Michigan Department of Insurance and Financial Services, insurance holders can expect a modification in payments for work loss. Starting on October 1, 2015 and continuing through September 30, 2016, the maximum amount that an individual injured in an automobile collision can receive for lost wages from his or her own no-fault insurance provider is $5,398 a month. This constitutes a six dollar increase from the previous maximum amount.

Partial Responsibility

Individuals involved in car accidents who make more than $70,000 a year, but who are also at least partially responsible for the crash, can still recover for excess work loss. The amount of compensation will depend on the percentage of fault shared by the parties. For instance, if a driver is 25% at fault for an accident, while the other party was 75% at fault, then the driver can recover up to 75% of any excess wage loss from the other driver’s insurance company.

If you or a loved one has sustained an injury in an automobile collision in Farmington Hills and are unable to work as a result, a lawyer can help you recover damages to compensate you for the time that you are unable work. Whether one or both parties are at-fault, please contact a Burton injury attorney at Nickola Law today for a free phone consultation.


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