MICHIGAN — ANNOTATED MODEL ESSAY: No-Fault Automobile Insurance
Michigan's no-fault automobile insurance act is the state's signature tested subject. It guarantees first-party benefits regardless of fault and sharply limits when an injured person may still sue in tort.
Nadia, a Michigan resident, carried a no-fault automobile insurance policy on her car. While she was driving, Tom negligently ran a red light and struck her. Nadia suffered a fractured spine that left her permanently unable to lift more than ten pounds, ending her career as a warehouse worker; she also incurred large hospital bills and lost wages while recovering.
Nadia's passenger, Greg, suffered only minor bruising that fully healed within two weeks with no lasting effect. Greg did not own a car and lived alone.
Nadia wants to know what benefits she can collect from her own insurer without proving Tom was at fault, and whether she may also sue Tom personally. Greg wants to know whether he can sue Tom.
(1) What first-party (PIP) benefits may Nadia recover from her own insurer, and on what fault showing? (2) May Nadia also sue Tom in tort? (3) May Greg sue Tom?
Model Answer — with annotations
Black text is the answer you could write under timed conditions. The gold boxes explain why each move earns points and flag where Michigan law departs from the general rule.
I. Michigan is a no-fault state with mandatory first-party benefits. Michigan's No-Fault Act requires owners of registered motor vehicles to maintain coverage, and in exchange an injured person recovers certain economic losses from his or her own insurer regardless of who caused the accident. These first-party benefits are called personal injury protection, or PIP. Because recovery does not depend on proving fault, Nadia need not show Tom was negligent to collect PIP from her own insurer.
II. The PIP benefits Nadia may recover. PIP benefits cover the injured person's economic losses arising out of the use of a motor vehicle: (a) all reasonable and necessary medical/allowable expenses for her care, recovery, and rehabilitation; (b) lost wages (work-loss benefits) for income she would have earned, subject to a statutory monthly cap and a defined benefit period; and (c) replacement-services expenses for ordinary household tasks she can no longer perform, up to a statutory daily amount. PIP does not pay for pain and suffering. Nadia collects these from her own insurer regardless of Tom's fault.
III. The tort threshold: noneconomic damages require a serious impairment of body function. Because PIP already covers economic loss, the Act abolishes ordinary tort liability for most car-accident injuries. A negligent driver remains liable in tort for noneconomic damages (pain and suffering) only if the injured person suffered death, permanent serious disfigurement, or a serious impairment of body function. "Serious impairment of body function" means an objectively manifested impairment of an important body function that affects the person's general ability to lead his or her normal life.
IV. Application to Nadia's tort claim. Nadia's fractured spine is objectively manifested (verifiable by imaging), it impairs an important body function (use of the back/spine and ability to lift and work), and it affects her general ability to lead her normal life — it permanently ended her warehouse career and limits her physical capacity. She therefore crosses the serious-impairment threshold and may sue Tom for noneconomic damages such as pain and suffering. She must prove Tom's fault for this tort recovery, unlike her no-fault PIP benefits.
V. Excess economic loss against the tortfeasor. Beyond noneconomic damages, an injured person who meets the threshold (or even one who does not, as to certain excess economic losses) may also recover from the at-fault driver economic damages that exceed the PIP benefits available — for example, work loss beyond the no-fault cap or benefit period. So Nadia may pursue Tom not only for pain and suffering but also for economic losses exceeding her PIP entitlement, such as wage loss above the statutory cap.
VI. Greg's claim fails the threshold. Greg suffered only minor bruising that fully healed within two weeks with no lasting effect. That injury is not death, is not permanent serious disfigurement, and is not a serious impairment of body function — it did not affect his general ability to lead his normal life and left no lasting impairment. Greg therefore cannot maintain a tort suit against Tom for noneconomic damages. (Greg may still claim PIP benefits for any allowable economic expenses; as an occupant without his own policy, his benefits are sourced under the no-fault priority rules, typically beginning with the insurer of the vehicle he occupied.)
VII. Conclusion. (1) Nadia recovers PIP benefits — allowable medical expenses, capped work-loss, and replacement services — from her own insurer without proving Tom's fault. (2) Nadia may also sue Tom because her permanent spinal injury is a serious impairment of body function, recovering noneconomic damages plus economic loss exceeding her PIP. (3) Greg may not sue Tom in tort because his minor, fully healed injury does not meet the threshold, though he may seek PIP benefits.
- States the no-fault bargain up front: guaranteed first-party PIP benefits regardless of fault, in exchange for a limit on tort suits.
- Lists the core PIP categories — allowable medical expenses, work loss, replacement services — and notes PIP excludes pain and suffering.
- Nails the Michigan tort threshold: death, permanent serious disfigurement, or serious impairment of body function, with the precise definition of the last.
- Applies the threshold definition element-by-element to a permanent spinal injury and contrasts the fault requirement for tort versus the no-fault PIP track.
- Recognizes the surviving tort claim for economic loss exceeding PIP limits.
- Uses the minor-injury passenger to show the threshold barring a weak claim, while preserving his PIP avenue under the priority rules.
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