» Michigan Auto Insurance Reform – What You Need to Know
April 28, 2020
Significant changes and options in Michigan auto insurance coverage go into effect on July 2, 2020. Whitaker Muller provides insight into the major alterations to the law that have a direct impact on the decisions you need to consider when choosing coverage levels.
Our goal is to make policy considerations and changes as seamless and easy as possible, answering your coverage questions and providing you with proactive updates on the reform.
Michigan Statutory Personal Injury Protection Changes
Personal Injury Protection (PIP) coverage, the medical payments portion of your auto policy, has been revised to be consistent with the revised no-fault statute. The definition of insured for PIP coverage is clarified to include only:
- The named insured(s).
- The named insured’s resident spouse.
- Resident relatives.
Individuals who are not named as insureds or a resident relative will no longer be provided PIP benefits on an unlimited basis. Instead, they will be subject to PIP benefits through the Michigan Assigned Claims Plan (MACP) with a limit of $250,000.
In addition, passengers and pedestrians who are not a named insured, spouse, or resident relative will no longer be able to claim PIP benefits through your policy. Instead, they will seek coverage from the MACP unless they qualify under another eligible automobile policy that would respond.
PIP Medical Coverage Options
Michigan’s current law also requires all auto insurance policies to provide unlimited medical and rehabilitation benefits, also known as PIP benefits. Effective July 2, 2020, as a purchaser of auto insurance in Michigan, you will have multiple PIP benefit levels from which to choose. These policy benefit levels are listed below.
PIP Medical Benefit Coverage Levels*
- Unlimited PIP Benefit
- $500,000 PIP Benefit
- $250,000 PIP Benefit
- $50,000 PIP Benefit (enrolled in Medicaid)
- Medicare Opt-out
- Qualified Health Coverage Exclusion (You must have other health or accident coverage that does not exclude or limit coverage for injuries related to an auto accident and has an annual deductible of $6,000 or less per individual.)
*Wage loss and household replacement services are in addition to the PIP Medical limit chosen.
If you opt out of medical and rehabilitation benefits on your auto policy, many health insurance policies will not provide coverage for attendant care, custodial care, wage loss; other benefits provided by the auto policy medical benefit and may limit rehabilitation benefits.
It is also important to remember that your health insurance will still require co-pays, deductibles, and co-insurance that your auto policy may not require.
Increased Required Limits for Liability Coverage
After July 2, 2020, default liability limit will be $250,000 per person/$500,000 per occurrence. You may elect lower limits by signing an acknowledgement form, but not lower than $50,000 per person/$100,000 per occurrence.
We strongly recommend that you review your policy and your vehicle and driver situation to see if any changes need to be made to your policies.
We are here to discuss your personal situation with you for more detailed information and to determine the coverage options best for you and your family. If you have any questions, please do not hesitate to contact our Personal Lines team for assistance.