Report No. 85
Limitations-Illinois plan.- An interesting feature of the Illinois plan is its provision for an optional additional coverage paying all medical, hospital and funeral expenses with no time limit, but with a maximum of $ 2,000 for funeral expenses, a limit of $ 50,000 per person and $ 100,000 per accident. This optional coverage would also extend wage loss benefit for five years and would pay survivors' benefits for five years as well. Also noteworthy in this plan, which preserves the negligence action, is the limitation imposed on recovery for pain and suffering. Such recovery can be had only in cases of dismemberment and disfigurement, and is limited to 50% of the first $ 500 and 100% of the excess.
(ii) Massachusetts.- One of the earliest plans in the United States for compensation for accidents caused by motor vehicles was the "Personal Injury Protection Plan" enacted in Massachusetts.1 Its "no fault" limits are low: $ 2.000 per person.2 The tort action continues to exist, with amounts paid by the Personal Injury Protection Plan deducted, and with damages for pain and suffering available only in cases of serious injuries. It should be observed, of course, that the vast majority of automobile accident injuries come within the limit of the Massachusetts plan.
1. Personal Injury Protection Act, Mass. Gen. Laws Ann. C. 90, section 34A, D.M.N.O. (Supp 1972); C. 175, sections 22EH, 113BC (1972); C. 231, section 6D (Supp 1972).
2. Hepple Tort, (1979), Appendix G, pp. 725-726.
(iii) Michigan.- Perhaps the most complete and generous plan in the U.S.A. is the one enacted in the state of Michigan late in 1972, to come into effect in the autumn of 1973.1-2 Under the Michigan scheme, compulsory personal protection insurance is intended to pay for all medical and hospital expenses and for all recovery and rehabilitation costs. Lost income is to be made up with a 15% deduction (the deduction takes account of the fact that the benefits are tax free) and with a maximum of 1,000 dollars per month and a limit of 3 years. In this sense, the limit for wages comes to 36,000 dollars. There is no limit for medical expenses3.
Provision is made in the Michigan law for periodic adjustments to reflect changes in the cost of living. In addition, upto $ 20 a day for other expenses may be claimed for a three year period. Death benefits include upto $ 1,000 for funeral expenses and payment of economic support to dependants at up to $ 20 a day per person to a maximum of $ 1,000 a month over a three year period. Benefits received from collateral sources are deductible from amounts payable under the personal protection insurance. An injured party, in Michigan, is still entitled to bring a negligence action, but the personal protection insurer may recover (from the damages awarded) any amount paid out under the policy, or deduct the recovery from any benefits owing. Recovery for non-pecuniary losses is limited to cases of death, serious disability or disfigurement.
1. Hepple Tort, (1979), Appendix G, pp. 725-726.
2. Michigan Compiled Laws Annotated, ss. 500-3103, et seq.
3. Keeton & Keeton Tort, (1977), p. 802 (Chart).