Michigan No-Fault Reform

On May 30, 2019, Michigan Gov. Gretchen Whitmer signed into law a bill that brings sweeping changes to the state’s no-fault auto insurance laws.  Personal Injury Protection (PIP) coverage represents one of the major provisions enacted. The no-fault coverage in Michigan is unique in that PIP provides for unlimited medical benefits for the lifetime of the injured person when those injuries result from an auto accident.

What has changed?

Under the old law, Michigan drivers were required to carry unlimited PIP coverage on their auto insurance policy. PIP coverage includes medical expenses following an automobile accident including; care, recovery, rehabilitation, attendant care, funeral expenses, wage loss, survivor benefits and replacement services. No limits were applied to payments for expenses, i.e. unlimited PIP. Under the new law, drivers can to select their level of coverage, from unlimited (as provided under existing law) to varying lower levels of protection.

This change in PIP coverage will need to be selected on any policy renewals from 7/2/2020 onward. 

What are you required to do?

You will need to decide if you are opting out of unlimited PIP coverage and what your new level of coverage will be. Before you select your coverage, you will need to understand if your health care plan will cover auto accident injuries and what  potential exposures there will be if you do not have unlimited PIP.  Your selection should ensure you are covered for all care, recovery, rehabilitation, attendant care, and other out-of-pocket expenses in the event of an auto accident injury. If your health care plan covers auto injuries, you may be required to send your auto carrier a letter confirming your coverage. You may have already received information from your auto carrier about your renewal and necessary documentation you may need.

What are your PIP coverage options?

• Unlimited PIP:  If you remain with unlimited PIP, your medical expenses from a covered auto accident are paid. This includes immediate health care needs, recovery and rehabilitation, lost wages (subject to state-limits) and all other allowable expenses. This is the default option, if a policyholder does not opt into another level.
• Limited PIP Coverage ($500,000 or $250,000):  If you select $500,000 or $250,000 maximum PIP, your insurance company will cover up to that amount of medical costs. If your medical insurance doesn’t coordinate with your auto policy, you’ll be responsible for any medical bills or long-term care needed beyond the elected limit. In addition, any out-of-network or deductibles and co-pays from your health insurance will apply.
• Limited Coverage $50,000:  This applies to those enrolled in Medicaid and their spouse and applicable family members enrolled in Medicaid or have qualified coverage or covered under a different auto policy with PIP medical.
• No PIP Coverage:  You are eligible to opt-out altogether if you have both Medicare Part A & B –you must have both parts, A & B – then all your medical bills will be processed through Medicare.