What are Allowable Expenses for No-Fault Benefits?

After a severe auto accident, medical bills are often just the beginning of your costs. Doctors' orders for bed rest, physical therapy, or lifting restrictions can place a burden on family and friends who step up to help. Michigan's No-Fault benefits include compensation for allowable expenses related to your injuries. Find out what counts as allowable expenses and how you can be compensated for services provided by your loved ones.

Michigan's mandatory No-Fault Auto Insurance is designed to make sure a car accident doesn't put state motorists into financial crisis. The law requires motorists to maintain insurance. When an accident happens it also requires insurance provider to pay for all allowable expenses. That includes medical bills and 85 percent of lost wages for up to 3 years, but it also includes so much more.

What Costs Count as Allowable Expenses?

The Michigan No-Fault Act requires insurance provider to pay PIP benefits for:

"Allowable expenses consisting of all reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person's care, recovery, or rehabilitation. ..." MCL 500.3107(1)(a).

That means that anything you reasonably need to pay for because of your injury could be covered as an allowable expense. Allowable expenses for "recovery" or "rehabilitation" are designed to restore you to your pre-injury self. "Care" is broader and includes devices or services needed because of the accident, even if you aren't progressing toward healing. Common allowable expenses could include:

• Physical therapy or personal training to restore strength and mobility
• Occupational or recreational therapy to rebuild physical and social skills
• Attendant care for patients who cannot be left alone or unsupervised
• Assistance with personal needs including medications, feeding, bathing, and dressing
• Installation of grab bars, ramps, and other accessibility modifications to your home

Many of the services covered as allowable expenses can be provided by a friend or family member. Often it is a spouse or an adult child who stays home to supervise an injured motorist or who helps with at-home exercises and medications. Judges have said that the Michigan No-Fault act restricts allowable expenses by type, not by who performs them. When a family member provides these services, you may be able to recover no-fault benefits based on the reasonable rate charged by a professional who provides the same service.

Allowable expenses are covered no matter how long you need them. After a catastrophic injury, you may need attendant care or maintenance exercises every day for the rest of your life. The Michigan No-Fault Act makes sure there is money to cover that care.

Replacement Services No-Fault Benefits Cover Everyday Tasks

However, courts have said that not every bill that comes due is covered as an allowable expense. Ordinary household tasks performed by a family member don't count for lifetime coverage. Instead, they fall into another section of the No-Fault Act:

"Expenses not exceeding $20.00 per day, reasonably incurred in obtaining ordinary and necessary services in lieu of those that, if he or she had not been injured, an injured person would have performed during the first 3 years after the date of the accident, not for income but for the benefit of himself or herself or of his or her dependent." MCL 500.3107(1)(c).

These expenses - often called "Replacement Services" - cover the things that you would have done for your home or your family if you hadn't been injured, but that someone else has to do for you because of your medical limitations. Common replacement services include:

• Landscaping and lawn maintenance
• Snow removal
• Housekeeping and maid services
• Child care
• Laundry services
• Meal preparation or delivery

Once again, a family member can provide these services, but you and your personal injury attorney will need to demonstrate the services are medically necessary. Family members can't be compensated for what they would have done anyway. The expenses must be clearly resulting from your injury to be covered. Even then, you will receive a maximum of $20.00 per day for services actually used during the first 3 years after the accident.

When and How to File Claims for Allowable Expenses and Replacement Services

When you are filing a claim for allowable expense benefits, you and your personal injury attorney will need to prove:

• That the expense is for your care, recovery or rehabilitation
• That it is reasonably necessary
• That it was "incurred", meaning that you are expected to pay for it
• That the charge is reasonable.

A claim for replacement services must also be proven to be necessary and actually paid or owed (incurred). When family members are the ones being paid, you will need to show that they expected to be compensated when they performed the service.

The time limits for each claim are different. Replacement services are only available for the first 3 years after the accident. Allowable expenses are available for any period of time they are needed. However, you must file a claim for those PIP benefits within one year of their coming due.

Your personal injury attorney can help you create calendars and statements to establish the work done by your family members and the time it took to do them. Talk to your auto accident attorney early to be certain you can be compensated for all your allowable expenses and replacement services.

At Sachs Waldman, our experienced personal injury attorneys are here to help. After your car accident we will review all your costs, including the work done by family members, to find allowable expenses and reimbursable replacement services. If you have been seriously injured in a motor vehicle accident, contact our Detroit personal injury law office at 1-800-638-6722.