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no-fault insurer michigan | social security benefits

Did You Know: Your No-Fault Insurer Can Make You Apply for Government Disability Benefits?

Even if you pay your monthly premium on time to the same auto insurer for years, that No-Fault Insurer can refuse to pay you lost wages because they want you to get disability benefits from the government instead.

Americans like to think of ourselves as ruggedly self-sufficient. Our political debates are full of language stigmatizing government “handouts” like welfare (Temporary Assistance for Needy Families) or even Medicaid and unemployment insurance. Americans, so the theory goes, ought to be able to solve our problems ourselves through hard work, guts, pulling ourselves up by our “bootstraps” and maybe by doing some temporary “belt tightening.” If all else fails, we can resort to the courts and the rule of law to protect us, like by making sure that the persons or companies we make contracts with are forced to honor those contracts, or to pay damages for breach.

In Michigan, however, those considerations go by the wayside when No-Fault Auto Insurers insist they need help to keep insurance premiums down. That is why the threshold to recover for “non-economic” injuries suffered in auto accidents in Michigan is set so high. Unless a party is killed, seriously permanently disfigured, or suffers a “serious impairment of body function,”[1] Michigan courts will not allow a party to recover for damages like pain and suffering.

A similar barrier to injured parties receiving benefits from their No-Fault Auto Insurer is found in MCL 500.3109. Under that statute, a No-Fault Auto Insurer can demand that you apply for governmental benefits like Social Security Disability Benefits (SSD). Then, whether you actually ever apply for those government benefits or not, your No-Fault Insurer is permitted to “subtract” the amount of whatever SSD benefits you should be eligible for from the wage replacement benefits they pay to you.

That deserves restating: Even if you pay your monthly premium on time to the same auto insurer for years, that No-Fault Insurer can refuse to pay you lost wages because they want you to get them from the government instead. Remember, yours was a private transaction between two private parties. But when the other party, the No-Fault Auto Insurer, is called upon to uphold their side, they get to shift that responsibility to the government instead.

Besides considering ourselves self-sufficient, Americans have also developed a deep skepticism of government agencies. When’s the last time you heard anyone say something good about the DMV? Unfortunately, dealing with the Social Security Administration can be equally frustrating and will always involve wait times, long forms to fill out, and constant reminders that incorrect information can be treated as fraudulent.

In short, it’s not a process anyone wants to go through alone. At Noud & Noud, we have experience with all types of accident victims, including those whose benefits can be put at risk by this statute. Besides representing you in pursuing the maximum recovery to which you are entitled, we can also assist you with navigating the challenging process of applying for social security benefits. Call today for a free consultation!

[1] MCL 500.3135

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