Auto Accident Demand Letter - Michigan

DEMAND FOR SETTLEMENT — MOTOR VEHICLE COLLISION

STATE OF MICHIGAN

[________________________________]
Attorneys at Law
[________________________________]
[________________________________], Michigan [____]
Telephone: [________________________________]
Facsimile: [________________________________]
Email: [________________________________]

DATE: [__/__/____]

VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED
AND VIA ELECTRONIC MAIL

[________________________________]
[________________________________]
[________________________________]
[________________________________], [____] [____]

RE: SETTLEMENT DEMAND — MOTOR VEHICLE COLLISION
Our Client: [________________________________]
Date of Loss: [__/__/____]
Your Insured: [________________________________]
Policy Number: [________________________________]
Claim Number: [________________________________]

Dear [________________________________]:

This firm represents [________________________________] ("Claimant") in connection with the motor vehicle collision that occurred on [__/__/____] in [________________________________] County, Michigan. This letter constitutes a formal demand for settlement of the third-party tort claim arising from this incident.

I. MICHIGAN-SPECIFIC LEGAL FRAMEWORK

A. Statute of Limitations

Under MCL 600.5805(2), the statute of limitations for personal injury actions is three (3) years from the date of injury.

The limitations period in this matter expires on [__/__/____].

B. Modified Comparative Negligence (51% Bar)

Michigan follows modified comparative negligence under MCL 600.2959. A plaintiff's damages are reduced by the percentage of fault attributable to the plaintiff. A plaintiff who is more than 50% at fault is barred from recovering non-economic damages but may still recover economic damages reduced by the plaintiff's percentage of fault.

Our client bears no fault whatsoever for this collision.

C. Michigan No-Fault Insurance Act — Comprehensive System

Michigan has one of the most comprehensive no-fault automobile insurance systems in the nation under MCL 500.3101 et seq. The system was significantly reformed by PA 21 of 2019 (effective June 11, 2019).

Key features of the current system:

PIP (Personal Injury Protection) Coverage Options:
Under the 2019 reform, Michigan policyholders may choose among the following PIP medical benefit levels:
☐ Unlimited lifetime PIP medical benefits
☐ $500,000 PIP medical benefits
☐ $250,000 PIP medical benefits
☐ $50,000 PIP medical benefits (if covered by qualifying health insurance)
☐ Opt-out of PIP medical (if covered by Medicaid)

Our client's PIP election: [________________________________]
PIP benefits paid to date: $[________]
PIP benefits remaining: $[________]

D. Tort Threshold — MCL 500.3135

To pursue a third-party tort claim for non-economic damages (pain and suffering), the plaintiff must establish a "threshold injury" under MCL 500.3135(1):

☐ Death
☐ Serious impairment of body function
☐ Permanent serious disfigurement

Our client meets the threshold because: [________________________________]

E. Mini-Tort Provision — MCL 500.3135(3)(e)

Under Michigan's mini-tort provision, a party who is less than 50% at fault may recover up to $3,000 for vehicle damage not covered by insurance from the at-fault driver. This is the only property damage recovery available in the third-party claim under Michigan's no-fault system.

F. No Damage Caps on Third-Party Tort Claims

Michigan does not impose statutory caps on compensatory damages (economic or non-economic) in third-party automobile tort claims, provided the tort threshold is met.

G. Minimum Insurance Requirements

Michigan requires the following minimum coverages (as amended by PA 21 of 2019, effective for policies issued/renewed after July 1, 2020, per MCL 500.3009):

• Residual bodily injury (BI) liability: statutory default $250,000 per person / $500,000 per accident (MCL 500.3009(1)). A named insured may opt down to a floor of $50,000 / $100,000 only by signing the DIFS-approved form (MCL 500.3009(5)); if no valid election is made, the $250,000/$500,000 default applies (MCL 500.3009(8)).
• Property damage liability (out-of-state): $10,000 (MCL 500.3009(1)(c)).
• Property protection insurance (PPI, in-state property damage): $1,000,000 (Michigan No-Fault Act, MCL 500.3121 et seq.).
• PIP medical: one of the elected coverage levels (unlimited / $500,000 / $250,000 / $50,000 / opt-out).

(The pre-July-2020 minimum of $20,000/$40,000 no longer applies.)

II. THRESHOLD INJURY ANALYSIS — MCL 500.3135

A. Serious Impairment of Body Function

Under MCL 500.3135(5), "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.

This is a three-part test established by McCormick v. Carrier, 487 Mich. 180, 795 N.W.2d 517 (2010):

1. Objectively Manifested:
☐ The impairment is supported by objective medical evidence, including:

• Diagnostic imaging: [________________________________]
• Clinical findings: [________________________________]
• Range of motion measurements: [________________________________]
• Neurological testing: [________________________________]

2. Important Body Function:
☐ The injuries affect the following important body function(s):
[________________________________]
[Describe the body function affected — e.g., musculoskeletal function of the spine, ambulation, use of extremities]

3. General Ability to Lead Normal Life:
☐ The injuries have affected our client's general ability to lead a normal life, including:

• Work limitations: [________________________________]
• Daily activity restrictions: [________________________________]
• Recreational limitations: [________________________________]
• Duration of impairment: [________________________________]

[________________________________]
[Provide detailed narrative with specific medical evidence supporting each element of the threshold test]

B. Permanent Serious Disfigurement (If Applicable)

☐ Our client sustained permanent serious disfigurement consisting of:
[________________________________]

III. PRESERVATION OF EVIDENCE DEMAND

☐ Complete claims file, including all adjuster notes and evaluations
☐ All photographs, videos, and surveillance footage
☐ All recorded or written statements
☐ Vehicle inspection reports, repair estimates, and salvage records
☐ Event Data Recorder (EDR) / "black box" data
☐ Cell phone records of the insured driver
☐ All insurance policy documents

IV. STATEMENT OF FACTS

On [__/__/____], at approximately [____] [a.m./p.m.], our client was [________________________________] on [________________________________] in [________________________________] County, Michigan. At that time, your insured, [________________________________], was operating a [____] [________________________________] (VIN: [________________________________]).

[________________________________]
[Describe the collision in detail]
[________________________________]

The [________________________________] [Michigan State Police / County Sheriff / Municipal Police] responded to the scene and prepared Crash Report No. [________________________________].

V. LIABILITY ANALYSIS

A. Defendant's Negligence

Your insured breached the duty of care by:

☐ Failing to maintain a proper lookout — MCL 257.402
☐ Following too closely — MCL 257.643
☐ Failing to yield the right of way — MCL 257.649 et seq.
☐ Speeding or exceeding safe speed — MCL 257.627, 257.628
☐ Running a red light or stop sign — MCL 257.612, 257.649
☐ Improper lane change — MCL 257.642
☐ Distracted driving / texting — MCL 257.602b
☐ Driving under the influence — MCL 257.625
☐ Other: [________________________________]

B. Comparative Fault Analysis

Under MCL 600.2959, our client bears zero percent (0%) fault for this collision.

VI. MEDICAL TREATMENT SUMMARY

A. Emergency / Immediate Treatment

B. Ongoing Treatment

C. Diagnosis Summary

☐ [________________________________]
☐ [________________________________]
☐ [________________________________]

D. Prognosis

[________________________________]

VII. ITEMIZED MEDICAL EXPENSES

Note: Under Michigan's no-fault system, most medical expenses are covered by PIP. The third-party tort claim includes medical expenses in excess of PIP limits and as evidence supporting the severity of injury.

Estimated Future Medical Expenses (Above PIP)

VIII. LOST WAGES AND EARNING CAPACITY

Note: PIP covers 85% of lost wages (up to 3 years, subject to policy limits). Third-party claim includes excess lost wages.

Employer: [________________________________]
Position: [________________________________]
Rate of Pay: $[________] per [hour/week/month/year]

IX. MINI-TORT PROPERTY DAMAGE CLAIM

Under MCL 500.3135(3)(e), our client is entitled to recover up to $3,000 for vehicle damage not covered by insurance.

X. PAIN AND SUFFERING / NON-ECONOMIC DAMAGES

Our client has endured significant non-economic damages, including:

☐ Physical pain and suffering (past and ongoing)
☐ Mental anguish and emotional distress
☐ Loss of enjoyment of life
☐ Inconvenience and disruption of daily activities
☐ Scarring and/or disfigurement
☐ Fear and anxiety
☐ Sleep disruption

These non-economic damages are recoverable because our client has met the tort threshold under MCL 500.3135.

Non-Economic Damages Claimed: $[________]

XI. LOSS OF CONSORTIUM

[If applicable:]

Claimant's spouse, [________________________________], has suffered a loss of consortium. Michigan recognizes loss of consortium claims in auto accident cases when the tort threshold is met.

Loss of Consortium Claimed: $[________]

XII. TOTAL DAMAGES SUMMARY

XIII. SETTLEMENT DEMAND

Based upon the foregoing, we hereby demand the sum of:

$[________________________________]

This demand is open for thirty (30) days from the date of this letter, expiring on [__/__/____].

XIV. BAD FAITH WARNING

MCL 500.2026 — Unfair Claims Settlement Practices

Under MCL 500.2026, an insurer that engages in unfair claims settlement practices is subject to regulatory action. Michigan courts also recognize a common-law duty of good faith in the handling of insurance claims. Commercial Union Ins. Co. v. Liberty Mutual Ins. Co., 426 Mich. 127, 393 N.W.2d 161 (1986).

MCL 500.3142 / § 500.3148 — Overdue PIP Benefits: 12% Interest and Attorney Fees

Under MCL 500.3142, PIP benefits are overdue if not paid within 30 days after the insurer receives reasonable proof of the fact and amount of loss, and an overdue payment bears simple interest at 12% per annum (MCL 500.3142(4)). Separately, under MCL 500.3148(1), if the court finds the insurer unreasonably refused to pay or unreasonably delayed payment of overdue PIP benefits, the claimant's reasonable attorney fee is charged against the insurer in addition to the benefits recovered.

Your company is on notice that failure to respond in good faith may result in penalty interest, attorney fees, and bad faith liability.

XV. ENCLOSED DOCUMENTS

☐ Medical records and bills from all treating providers
☐ PIP payment records and EOBs
☐ Police/crash report
☐ Photographs of vehicle damage and injuries
☐ Employer verification of lost wages
☐ Insurance declarations page showing PIP election
☐ [________________________________]

XVI. RESPONSE REQUESTED

Please confirm receipt and provide a substantive response within thirty (30) days.

Respectfully submitted,

[________________________________]
Attorneys for [________________________________]

By: _________________________________
[________________________________]
Michigan Bar No. P[________________________________]
[________________________________]
[________________________________], Michigan [____]
Telephone: [________________________________]
Email: [________________________________]

MICHIGAN PRACTICE NOTES AND CHECKLIST

☐ No-Fault System: One of the most comprehensive in the nation; significantly reformed in 2019 (PA 21 of 2019)
☐ Tort Threshold: Must prove serious impairment of body function, permanent serious disfigurement, or death (MCL 500.3135)
☐ McCormick Test: Three-part test for serious impairment — objectively manifested + important body function + affects general ability to lead normal life
☐ 51% Bar (Non-Economic Only): Plaintiff >50% at fault barred from non-economic damages only; economic damages still recoverable but reduced (MCL 600.2959)
☐ Mini-Tort: $3,000 max property damage recovery for party <50% at fault (MCL 500.3135(3)(e))
☐ PIP Elections: Verify client's PIP level — unlimited, $500K, $250K, $50K, or opt-out
☐ One-Year PIP Notice / One-Year-Back: MCL 500.3145 — notice within 1 year of accident; recovery limited to loss incurred in the year before suit
☐ PIP Overdue Interest & Fees: 12% simple interest on overdue PIP (MCL 500.3142(4)); attorney fees for unreasonable refusal/delay (MCL 500.3148)
☐ No Damage Caps: Full compensation available in third-party tort claims
☐ Government Claims: Court of Claims Act (MCL 600.6419) for state entities; governmental immunity (MCL 691.1401 et seq.)
☐ Minimum Liability (residual BI): default $250,000/$500,000; opt-down floor $50,000/$100,000; out-of-state PD $10,000 (MCL 500.3009)

SOURCES AND REFERENCES

• MCL 600.5805(2) (Statute of limitations — 3 years)
• MCL 600.2959 (Comparative fault)
• MCL 500.3135 (Tort threshold; serious-impairment definition at (5); mini-tort at (3)(e))
• MCL 500.3009 (Residual liability limits — default 250/500, opt-down floor 50/100 after 7/1/2020)
• MCL 500.3142 (Overdue PIP benefits — 12% simple interest)
• MCL 500.3145 (One-year notice / one-year-back)
• MCL 500.3148 (Attorney fees for unreasonable refusal/delay)
• MCL 500.3101 et seq. (No-Fault Insurance Act; reformed by PA 21/22 of 2019)
• MCL 500.2026 (Unfair claims practices)
• MCL 257 (Michigan Vehicle Code)
• Michigan Legislature: https://www.legislature.mi.gov
• PA 21 & 22 of 2019 (No-fault reform; coverage changes eff. 7/1/2020)