What To Know About Catastrophic Injuries And Compensation If You Are A Victim

As Michigan’s largest personal injury law firm, you can probably imagine we’ve worked with more than our fair share of accident victims – innocent people with injuries ranging from minor cuts, bruises and broken bones all the way to extreme cases where people who’ve been severely hurt will never be the same again.

The latter kinds of incidents are commonly called “catastrophic injuries” and can include a variety of medical diagnoses, such as second- and third-degree burns, traumatic brain injuries, spinal column injuries, amputations, or equally severe cases where the victims end up paraplegic or even quadriplegic. In extreme circumstances such as these, the victims often require costly medical care lasting for the rest of their lives and are rendered unable ever to work in their original careers again. As you might guess, that kind of double whammy of lost income and extreme medical bills can be truly devastating.

Fortunately, Michigan no-fault insurance provides a way for drivers to protect themselves and their families from experiencing at least some of this pain. It’s called Personal Injury Protection with unlimited benefits. Pay close attention – we said unlimited benefits. Due to recent changes to the state’s no-fault law, you can certainly try to save money on your car insurance premiums by choosing a plan with a lower level of PIP benefits (or even no PIP benefits at all if, for instance, you happen to be on Medicare), but we do not recommend skimping on this protection.

Here’s just one example supporting our position: Consider that the average initial hospitalization cost of a spinal cord injury caused by a car accident is $140,000 (using figures from 2020, which have certainly risen in the past five years!). Not only that, but subsequent medical care over the first year after a spinal injury adds at least another $198,000 on average. If you think that’s scary, it gets even worse. The typical lifetime cost of care for a quadriplegic skyrockets to an astounding $1.35 million or more! If you don’t have a million bucks in your bank account, these kinds of costs could probably force you into bankruptcy and leave your family penniless. (Which might explain why medical costs are among the leading causes of bankruptcy in America.)

How are Michiganders Protected from These Excessive Costs?

All of those expenses are certainly one reason why the state created the Michigan Catastrophic Claims Association (MCCA), a non-profit organization which is designed to protect insurance companies (and ultimately policyholders like all of us) from the almost unimaginable (and certainly unmanageable) costs that arise from such severe injuries. Yes, we all pay for this coverage… but it safeguards each and every one of us should the worst happen and we suffer a catastrophic injury in a car accident.

It works like this (quoting from the association’s website): “The MCCA reimburses no-fault insurance companies for Personal Injury Protection (PIP) medical claims paid in excess of a set amount under policies of insurance providing unlimited lifetime coverage. Currently that amount is $635,000. That means that the insurance company pays the entire claim under policies providing unlimited lifetime coverage, but is reimbursed by the MCCA for medical costs over $635,000.” By providing this financial security blanket, the MCCA helps keep insurance companies solvent, and provides a stable foundation for the insurers that protect us all from catastrophic medical and rehabilitation costs.

And really, it’s actually a very small price to pay for a very high level of protection. For example, the 2024-25 MCCA assessment added to policy premiums for people who choose unlimited PIP benefits is just $90 per vehicle. (In other words, according to figures published by Bankrate, this year’s assessment is less than 3 percent of the average annual cost of full-coverage car insurance in Michigan.) By the way, you should know that even if you don’t opt for unlimited PIP coverage, you’ll still be assessed an MCCA fee of $20 per vehicle this year.

Michigan Law Also Safeguards Your Right to Sue for “Serious Impairment of Body Function”

Some drivers may be under the misconception that because we have no-fault insurance in Michigan it means innocent accident victims can only be compensated by their own insurance companies. However, a valuable “loophole” in the state’s insurance law allows accident victims to seek compensation from the irresponsible people (and their insurers) who caused them to suffer catastrophic injuries that resulted in death, “serious impairment of body function,” or “permanent serious disfigurement.” Clearly, the kinds of injuries we’ve discussed in this article (among others) fall into those categories.

So if you’ve been seriously injured, you could benefit from our long experience helping accident victims successfully file suit against the people who caused them to experience the pain and suffering that accompany such catastrophic injuries. To learn more, check our website for details or call 855-MIKE-WINS (855-645-3946) to speak with a real person 24/7/365. In just a few minutes you’ll get a clear picture of what we can do for you, including how we can help you be reimbursed for the expenses you’ve paid, not to mention being fairly compensated for the damaging long-term impacts you’ve experienced.

Content checked by Mike Morse, personal injury attorney with Mike Morse Injury Law Firm. Mike Morse is the founder of Mike Morse Law Firm, the largest personal injury law firm in Michigan. Since being founded in 1995, Mike Morse Law Firm has grown to over 200 employees, served 40,000 clients, and collected more than $1.5 billion for victims of auto, truck and motorcycle accidents. The main office is in Southfield, MI but you can also find us in Detroit, Sterling Heights and many other locations.