June 2016 • Volume 104 • Number 6 • Page 45
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From the Newsletters - Thinking of representing an Illinoisan in an out-of-state accident? Think again
Differences in state law can make a routine case anything but.
"The perils of representing Illinois residents involved in an out-of-state accident"
By James H. Koning
Tort Trends - April 2016
Suppose one of your neighbors is injured in a car accident in Michigan. She calls and asks you to represent her. You've handled lots of Illinois accident cases, and you feel comfortable with this one based on what she tells you.
Not so fast, warns James H. Koning in the April Tort Trends newsletter. There are differences in Illinois and Michigan law that make this far from routine for an Illinois lawyer who doesn't practice in Michigan.
"Michigan has no-fault insurance," Koning writes. "According to Michigan law, most out-of-state insurers have filed a Michigan certification, which means that your clients' insurance policy automatically turned into a Michigan insurance policy once they crossed the state line."
An insured under a Michigan no-fault insurance policy is entitled to generous benefits, Koning writes, including "lifetime medical for accident-related injuries, up to three years of wage loss,…'replacement services' up to $20 per day for up to three years," and more, none of which must be repaid out of settlement proceeds.
The catch? "[O]nerous notification requirements and limitations of actions" apply to these benefits, Koning writes. "Written notice requesting these benefits must be made in writing to the insurer within one year of the date of the accident. Furthermore, if an insurer does not pay a benefit within a one-year period" it need not pay, he notes, which is not the way it works in Illinois.
Because the benefits in Michigan are so generous, the stakes can be high. "In the past year, our firm has been involved in three situations where an Illinois lawyers did not obtain no-fault benefits for their Illinois clients involved in a Michigan collision," Koning writes. "In one of those cases, the malpractice claim against the Illinois lawyer was significantly larger than the underlying claim against the at-fault driver because the no-fault benefits paid were in excess of the policy limits of the at-fault driver."
Bottom line: "While it may be tempting to represent an Illinois client with an out of state claim, serious perils exist, setting a trap for the unwary," Koning writes.