Disability After A Car Accident: What To Know

Michigan has various legal mechanisms to ensure that you can cover your necessities if you suffer injuries in a car accident. Two of these are no-fault work loss benefits and short-term disability insurance. 

How these two policies provide coverage can get confusing, and a mistake could lead to you missing out on the compensation you deserve. Alternatively, you might have to pay back the compensation you obtained if you make an error. Learn what you need to know about getting disability coverage after a car accident.

What Are Auto Accident Short-Term Disability Benefits?

Short-term disability benefits refer to a private insurance policy Michigan residents can obtain. This coverage reimburses part of your income if you can’t go back to work because of injuries, including from a car accident. 

For example, suppose you break a leg bone during a crash and cannot work for your employer while you heal. If recovery takes five months, short-term disability benefits pay whatever portion of your income that the policy states.

What Is Michigan’s No-Fault Work Loss Benefits?

No-fault work loss benefits are another way to cover a portion of your income if car accident injuries limit your ability to work. This coverage:

• Pays up to 85% of the wages you were earning before the accident
• Lasts for up to three years
• Has a monthly maximum that the state sets annually according to the cost of living

Michigan’s no-fault insurance statutes require all drivers to purchase a minimum amount of auto insurance that includes these benefits. Therefore, this is the primary way many injured people cover lost wages after a motor vehicle collision. 

The monthly maximum for the fiscal year of 2025 (September 2024 to October 2025) is $7,014. This is a tax-free payout, which is why the state caps the benefits at 85%.

What Is a Coordinated No-Fault Auto Insurance Policy, and What Does It Cover?

Under Michigan Law (MCL 500.3109a(1)), a coordinated no-fault insurance plan means that you have multiple policies that work together to cover your accident injuries. For example, you can have health insurance or an employer-sponsored policy with a short-term disability clause in addition to your standard no-fault coverage. 

With this arrangement, you only begin to collect no-fault work loss benefits after you’ve recovered all of your wage benefits from the other plan. The benefit of this coordinated setup is you can pay a lower premium on your auto insurance. 

If you don’t opt to have your health or disability benefits from another plan be the first payor for lost wages, you have what the state calls an “uncoordinated policy.” With an uncoordinated auto policy, you’ll rely on the standard no-fault benefits.

Can You Collect Disability and No-Fault Wage Loss Coverage at the Same Time?

The terms of your policies determine whether you will collect from both. For instance, your disability insurance may not cover the maximum amount of what your no-fault benefits offer. You can receive that disability compensation, and then get an additional payout from your car insurance company until it reaches the monthly maximum no-fault work loss.

What About Coverage Through the Michigan Assigned Claims Plan?

The Michigan Assigned Claims Plan (MACP) provides coverage to people who cannot otherwise get auto insurance. Eligible individuals include motorcycle riders, pedestrians, cyclists and passengers who don’t have their own car insurance. 

MACP is only for people who have no legal obligation to get personal injury protection auto insurance. This allows these travelers to access benefits for lost wages, along with other typical damages from accident injuries. 

According to MCL 500.3172(5), the assigned insurer reduces the compensation it pays if you already have a short-term disability plan. The state caps your benefits at the year’s monthly maximum if you’re using disability coverage and the MACP.

Can You Get a Larger Payout Than the Maximum Monthly Amount of Michigan’s No-Fault Work Loss Benefits? 

You can potentially get more money than the maximum no-fault benefits, typically through one of two ways. First, you could purchase short-term disability insurance for work loss that covers more than the monthly maximum. You may be able to get this kind of coverage through your employer.

Remember that if you do this and collect more than what the no-fault benefits would have provided, you cannot “double dip” by taking no-fault benefits in addition to the compensation from your private policy. If you collect from both, you’ll have to repay your no-fault benefits.

The other way to get more than what your insurance claim will pay out is to file a third-party lawsuit against the at-fault persons or entities. In this case, you would claim wage loss benefits beyond what your insurance covers. Keep in mind that this “excess” amount is taxable, so you’ll need to set some aside.

How Do You Prove a Disability?

Each policy will have its own guidelines for proving that you have a disability that prevents you from working. You’ll have to review your specific short-term disability plan to see what the insurer requires for proof. However, the requirements will likely be similar to the standard no-fault plan.

For lost wages under the typical no-fault policy, a doctor gives you a disability certificate that explains the type of disability and how long you will be unable to work. 

To determine the amount of your compensation, you’ll provide a wage verification form from your employer, along with two months of pay stubs and your recent tax returns. If you are a self-employed individual, you may have to show bank statements, invoices and 1099 forms. 

What if you were temporarily unemployed or working part-time and looking for full-time work? With the no-fault system, you can get the equivalent of your last month of full-time wages. 

How Long Does It Take To Receive the Insurance Check?

The standard no-fault disability benefits must come to you within 30 days after you provide proof of your disability and earnings. With other types of insurance benefits, the company may have 60 days in some circumstances. This is another situation where you need to review your policy carefully to understand the timeframe. 

Fight for the Disability Benefits You Deserve

Trying to claim work loss benefits after a car accident can quickly get confusing if you have multiple policies that cover short-term disability. If you need help navigating the situation, please call our team at Big Auto Accident Attorneys. 

We provide a free consultation to review your case. Then, we can help you determine how you can get all of the compensation you deserve for lost wages and other damages.

_{Photo by Rollz International on Unsplash}