Michigan Pre-Settlement Funding: No-Fault Guide (2026)

What This Guide Covers

Michigan operates the most complex auto no-fault system in the country. After decades of unlimited personal-injury-protection (PIP) benefits, the state's 2019 no-fault reform introduced tiered choices, imposed a fee schedule on medical providers, and reshaped attendant-care and long-term catastrophic-injury benefits. For plaintiffs, the practical result is that case value in a Michigan auto injury now depends heavily on the specific PIP tier the injured party elected before the accident — and on whether the injury crosses the "serious impairment of body function" threshold to open a tort claim against the at-fault driver. This guide walks through the current framework, the pending litigation over the reform, and how pre-settlement funding fits.

This is a plain-English explainer, not legal advice. Michigan no-fault is one of the most litigation-intensive areas of American tort law; only your attorney can evaluate the specific facts of your case.

The Two Michigan Cases: PIP and Tort

The PIP claim

Every Michigan auto policy includes PIP coverage that pays first-party benefits regardless of fault: medical expenses, wage loss (typically 85% of gross for up to three years), replacement services, and — where injuries are catastrophic — attendant care. The PIP claim runs against the injured party's own carrier (or, for uninsured injured parties, potentially the Michigan Assigned Claims Plan).

The tort claim

The tort claim runs against the at-fault driver for damages not covered by PIP — primarily non-economic damages like pain and suffering. To bring a tort claim, the plaintiff must cross Michigan's "serious impairment of body function" threshold under MCL 500.3135, which the Michigan Supreme Court has defined and re-defined multiple times over the past two decades. Cases that do not clear the threshold are limited to PIP benefits alone.

The 2019 Reform and the PIP Tier Choices

Before June 2019, Michigan auto policies included unlimited lifetime PIP for injuries requiring long-term care — a feature unique in the U.S. and, for a subset of catastrophically injured plaintiffs, worth millions of dollars over a lifetime. The 2019 reform (Public Acts 21 and 22 of 2019) replaced the unlimited default with a menu of tier choices:

Tier	Cap	Eligibility
Unlimited	No cap (historical default)	All drivers
$500,000	Lifetime per person	All drivers
$250,000	Lifetime per person	All drivers
$250,000 (Medicare-coordinated)	Lifetime per person; Medicare pays after cap	Drivers with Medicare
$50,000	Lifetime per person	Drivers or dependents on Medicaid
Opt-out (excluded)	No PIP; only ER covered	Drivers with qualifying health coverage

The tier election is made at policy inception and applies to the household. It is the single most consequential variable in any Michigan auto injury case post-2019: catastrophic injuries under a $50,000 cap look nothing like catastrophic injuries under unlimited.

The Provider Fee Schedule

Also from the 2019 reform: MCL 500.3157 imposes a fee schedule on medical providers treating auto no-fault patients. Providers are limited to 200% of Medicare (with graduated reductions to 190% and eventually 180% over subsequent years) for services with a Medicare code, and 55% of the provider's 2019 charge for services without a Medicare code (attendant care and similar). Litigation over the fee schedule's application to attendant care and specialty rehab providers has moved through the Michigan appellate courts continuously since 2020.

For a plaintiff, the practical result is that "medical bills" in a Michigan no-fault case increasingly reflect fee-schedule-limited amounts rather than the provider's billed charges. Case value adjusts accordingly.

Attendant Care and the Family Provider Rule

Attendant care — paid caregiving for a catastrophically injured plaintiff who cannot perform activities of daily living — has historically been one of the highest-value PIP benefits, particularly where a family member provides care in the home. The 2019 reform limited family-provided attendant care to 56 hours per week absent a separate agreement with the insurer, with hourly rates now subject to the fee schedule for post-reform policies.

Family attendant-care cases are complex, ongoing, and often litigation-heavy. Where the injury is catastrophic, monthly attendant-care benefits can run $5,000–$15,000; these are the benefits most affected by the reform's caps.

The Serious-Impairment Threshold

To bring a tort claim against the at-fault driver, the plaintiff must show a "serious impairment of body function" under MCL 500.3135. The Michigan Supreme Court's test — from McCormick v Carrier, 487 Mich 180 (2010) — asks: (1) is there an objectively manifested impairment; (2) of an important body function; (3) that affects the plaintiff's general ability to lead a normal life? Cases that clear the threshold produce tort recoveries; cases that do not stay within the PIP framework.

Practical implication: soft-tissue-only auto injuries in Michigan often do not clear the threshold. Cases with surgery, permanent limitation, or documented long-term impairment typically do. Funding underwriters look at the medical documentation early in a Michigan case for exactly this reason.

Rate Norms and Advance Sizes

Michigan has no statutory rate cap on non-recourse pre-settlement funding. Market pricing tracks the national range — typically 2.0%–3.5% monthly with a 2–3x hard cap on total repayment. Advance sizes track case type:

• PIP-only case with catastrophic injury (unlimited or high tier): larger advances, often $10,000–$40,000, backed by predictable long-tail benefits.
• PIP-only case with lower tier: smaller advances calibrated to the PIP cap and remaining benefits.
• Tort case that clears the threshold: underwritten on standard third-party liability parameters (see our 50-state coverage matrix for the underlying liability numbers).
• Combined PIP + tort: the strongest funding profile — both recovery sources, both underwrittable.

For the general framework on how pre-settlement funding is structured, see our companion piece on how pre-settlement funding actually works. UM/UIM comes into play against uninsured or underinsured at-fault drivers just as elsewhere — see UM/UIM coverage.

Litigation Landscape

The 2019 reform has generated some of the most active auto-insurance litigation in the country. Key pending or recently-resolved issues include:

• Retroactive application of the fee schedule to pre-reform policies (the Michigan Supreme Court has weighed in multiple times)
• Whether the fee schedule extends to certain specialty rehab facilities and post-acute care providers
• How the family-provided attendant-care rate cap applies to services rendered before the reform
• MCCA assessment recalibration following the reduction in unlimited PIP obligations

Plaintiffs with pre-2019 catastrophic injuries have had the most contested cases, particularly around whether their vested benefits under the pre-reform law can be limited by the reform's fee schedule. The Michigan Court of Appeals and Supreme Court continue to work through these issues.

Statute of Limitations

Michigan's statute of limitations for personal-injury tort actions is three years under MCL 600.5805(2). PIP claims must be filed within one year of the date the specific expense was incurred (MCL 500.3145), though the practical filing deadline is often earlier because of notice requirements. Wrongful-death actions have a three-year window from the date of death.

The one-year PIP filing rule is a trap for the unrepresented — a plaintiff who assumes there is a longer window can lose recoverable benefits by delay. Attorneys handling Michigan cases file PIP claims promptly regardless of whether the tort case is ready.

Where Funding Fits Best

Michigan cases where funding tends to make the most sense include: catastrophic injuries under an unlimited or high-tier PIP with predictable ongoing benefits; serious-threshold tort cases with clear liability; and combined PIP + tort cases where both recovery sources are in play. Cases where funding is often less appropriate: soft-tissue-only cases that may not clear the tort threshold; PIP-only cases with a $50,000 cap that is close to being exhausted; and cases where the tier election is disputed. Your attorney's judgment on threshold viability is central to the funding conversation. For the mechanics of how funding is repaid at disbursement (Michigan or anywhere), see our companion piece on funding and medical liens. For a state guide comparison see our Pennsylvania guide and attorney process at our attorney resources.

The Bottom Line

Michigan no-fault post-2019 is the most technically complex auto-injury regime in the country. Case value depends on the intersection of PIP tier, medical-provider fee schedule, threshold viability for the tort claim, and — where applicable — attendant-care benefits. For plaintiffs whose cases sit within this framework, pre-settlement funding is available, priced at national market ranges, and enforceable under Michigan law. The specific offer depends on which pieces of the case (PIP, tort, or both) are producing value and how the tier and threshold questions resolve.

If your case is in Michigan and you need working capital during the wait, apply for a pre-settlement advance. Underwriting will factor the tier, threshold status, and treatment trajectory into the offer.