What is Michigan’s car insurance reform?
Michigan’s new no-fault law means drivers have more options for personal injury protection coverage, also known as “PIP benefits.” PIP covers medical bills from injuries sustained in an auto accident, as well as rehabilitation costs, lost wages, attendant care (services tending to an injured person) and other expenses. While personal injury protection has always been mandatory in Michigan, the new reform means you have the freedom to select a PIP coverage that best represents your needs and budget. Here are the six choices:
Unlimited coverage: Pays for all allowable expenses pertaining to your care, recovery, and rehabilitation resulting from a covered accident, including attendant care. You pay more for the unlimited coverage option, but the choice reduces your out-of-pocket expenses in the event of a claim.
$500,000 limit: Pays up to $500,000 per person per covered accident. This option likely costs less than unlimited coverage, but any expenses over $500,000 will be paid by your health insurance or out of your own pocket.
$250,000 limit: Pays up to $250,000 per person per covered accident. While this option may cost less than higher coverage limits, any expenses greater than $250,000 will be paid by your health insurance or out-of-pocket.
$250,000 limit with some or all persons excluded from PIP: Pays up to $250,000 per person per covered accident with you, your spouse, a resident relative(s), or household member(s) excluded from PIP coverage (excluded household members must have qualified health coverage). You pay a lesser premium for this coverage, due to reduced coverage for anyone who is excluded.
$50,000 limit: Pays up to $50,000 per person per covered accident, and only available if you’re enrolled in Medicaid and all residents have Medicaid, qualified health coverage, or are covered with PIP under another auto policy. This option costs less than carrying higher coverage limits but any expenses over $50,000 are the responsibility of your health insurer or paid on your own.
No PIP coverage: If you have Medicare Parts A and B, and all household members have qualified health coverage or are covered with PIP under another auto policy, you can select no PIP coverage. That means you and anyone else covered under your auto policy will rely on health coverage to pay for medical expenses resulting from an auto accident.
FAQs about the Michigan auto insurance reform bill
When will the Michigan auto insurance bill take effect?
The reform will be effective as of July 2, 2020.
Do I need to make changes to my existing auto insurance policy?
There’s nothing you need to do right now. Your next renewal offer will include information about the new coverage options, so you can make your desired changes to your policy.
What if I’m a new Progressive customer?
If you’re shopping for an auto insurance policy on or after July 2, 2020, the new coverage options will be displayed when you quote.
How will I know which PIP coverage to choose?
Determining which options you’re eligible for depends on whether you and your family carry qualified health coverage and how well you’re covered. Remember, as outlined in the PIP choices above, your health insurance is responsible for any expenses above your PIP coverage limits. If you or any of your family members don’t have qualified health coverage, choose enough PIP coverage to protect against paying for injuries from an accident out of your own pocket. Also, pay attention to your health insurance deductible. A high deductible could result in unwanted out-of-pocket expenses for injuries that aren’t covered under a lower limit PIP option.
For more information, contact us at The Huttenlocher Group!