Interest and attorney fees

When a bill becomes overdue

MCL 500.3142 makes PIP benefits payable as loss accrues. Benefits are overdue if not paid within 30 days after the insurer receives reasonable proof of the fact and of the amount of loss sustained. If the proof supports only part of a claim, that part is overdue 30 days after the insurer receives it, and the rest becomes overdue 30 days after it is later supported. A payment counts as made on the date it is mailed in a properly addressed, postpaid envelope.

The 90-day billing rule

The 2019 reform added MCL 500.3142(3). If a bill for allowable expenses is not provided to the insurer within 90 days after the product, service, accommodation or training was provided, the insurer gets 60 extra days, for 90 days in total after it receives reasonable proof, before the benefit is overdue. Late billing does not forfeit the claim, but it delays interest by two months. See reasonable proof for what starts the clock. In VHS of Michigan v. Allstate (unpublished, March 10, 2026), the Court of Appeals explained how the extended deadline would apply to a late hospital bill and sent the case back to decide when reasonable proof arrived.

How 12% interest is calculated

MCL 500.3142(4) says an overdue payment bears simple interest at 12% a year. Simple interest is not compounded. On a $10,000 balance overdue for 18 months, interest is $10,000 × 12% × 1.5 = $1,800. Interest runs separately on each bill from its own overdue date, which is why a claims ledger by date of service and date of proof matters.

Penalty interest is not a punishment that depends on fault. The Court of Appeals has held that interest is owed regardless of the insurer’s good faith (Williams v. AAA Michigan, 2002) and that the claimant does not have to prove the insurer acted arbitrarily or unreasonably (Bronson Health Care Group v. Titan Insurance, 2016). In VHS of Michigan v. Allstate, the trial court’s denial of penalty interest was vacated because it focused on the insurer’s diligence instead of the date reasonable proof was received.

The same 12% applies when DIFS reverses a utilization review denial (Mich Admin Code R 500.65(6)). One exception: for claims paid through the Michigan Assigned Claims Plan, MCL 500.3172(4) says no interest is owed (see priority disputes) for any period the claim is reasonably in dispute.

Attorney fees under MCL 500.3148

MCL 500.3148(1) entitles a claimant’s attorney to a reasonable fee in an action for overdue benefits. The fee “is a charge against the insurer in addition to the benefits recovered” if the court finds the insurer unreasonably refused to pay or unreasonably delayed proper payment.

• The presumption. Once benefits are shown to be overdue, a rebuttable presumption arises that the refusal or delay was unreasonable (Brown v. Home-Owners, 2012). The insurer must justify it with a legitimate question of statutory construction, constitutional law or factual uncertainty (Ross v. Auto Club Group, 2008).
• The initial refusal is what counts. Under Moore v. Secura (2008), the question is whether the insurer’s initial refusal was reasonable, judged by what it knew then.
• Ignoring available evidence is risky for the insurer. In JB v. Farm Bureau (unpublished, July 22, 2026), a fee award was upheld where the insurer relied on one line of a physician’s history, never asked the physician for clarification, and investigated sparsely despite a record in its file reflecting the diagnosis.
• Providers recover fees too. In True Care Physical Therapy v. Auto Club (2023), the Court of Appeals affirmed a provider’s award of benefits, costs and attorney fees.

What the 2019 reform changed in section 3148

• Attendant care and nursing: under MCL 500.3148(4), fees cannot be awarded on future payments for attendant care or nursing services ordered more than three years after the judgment. If the care is later suspended or terminated and a new order is entered, a new three-year window can apply.
• No fee on referrals to related providers: MCL 500.3148(5) bars a fee award to an attorney for treatment by a provider in which the attorney, or a related person, had a direct or indirect financial interest, including a financial incentive within 24 months before or after the service.
• No early liens: an attorney representing an injured person may not claim, file or serve a lien for fees until payment for the claim is both authorized and overdue.
• Fees against claimants: MCL 500.3148(2) lets a court award the insurer fees for a fraudulent or excessive claim, and subsection (3) lets the insurer offset that award against benefits.

How this changes the math on small balances

A $1,500 therapy balance is rarely worth suing alone. Twenty of them against one insurer, each earning 12% from its own overdue date, with a fee claim if the denials were unreasonable, often are. We file in batches by insurer for that reason. We do not promise any recovery amount; our fee is a contingency set in a written agreement before we file. See fees and costs and send us your aging through the provider intake portal.

Sources: MCL 500.3142, 500.3148 and 500.3172(4); Mich Admin Code R 500.65(6); Williams v AAA Michigan, 250 Mich App 249 (2002); Bronson Health Care Group, Inc v Titan Ins Co, 314 Mich App 577 (2016); Brown v Home-Owners Ins Co, 298 Mich App 678 (2012); Ross v Auto Club Group, 481 Mich 1 (2008); Moore v Secura Ins, 482 Mich 507 (2008); True Care Physical Therapy, PLLC v Auto Club Group Ins Co (Mich App, 2023); VHS of Michigan, Inc v Allstate Ins Co (Mich App, unpublished, Mar 10, 2026); JB v Farm Bureau Gen Ins Co (Mich App, unpublished, July 22, 2026).