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Don't Close That File: Three ways for PIP insurers to get their money back

 Michigan Defense Quarterly, Vol. 22, No. 4 April 2006
By: Joseph R. Enslen and Mary Catherine Beach

Straub Seaman & Allen 

Unlike other no-fault states, it is a foregone conclusion that in Michigan payments made for wage loss and medical expenses arising from car accidents cannot be recovered in subrogation. Upon conclusion of PIP claims, accordingly, the vast majority of Michigan insurers close their files without consideration of recouping all or a portion of the indemnification. There are now three sources of potential recovery of payments made for personal injury protection, two of which are longstanding but worthy of review. The most recent addition to the PIP insurer’s arsenal for recovery is actually common law subrogation—against out-of-state tortfeasors. As recognized by the Michigan Court of Appeals in June of 2005, this right exists even if the out-of-state tortfeasor is properly insured in his or her state, and even though he or she is not required to obtain Michigan no-fault security.

The second and third avenues for recovery are provided within the no-fault act itself. First, anyone who is required to have Michigan no-fault insurance but does not is liable for re-payment to the PIP insurer without regard to fault. Second, there is a potential for either a reduction of PIP benefits payable or reimbursement for benefits paid if the insured recovers (1) in a third-party action arising from an out-of-state accident, (2) from an uninsured Michigan owner or operator, or (3) from an action in Michigan based on intentionally caused personal injury or property damage.

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