Michigan Car Insurance

No-fault insurance is a type of car insurance coverage that helps pay for covered person's medical bills if injured in a car accident, regardless of who caused the accident. No-fault insurance is also called Personal Injury Protection, or PIP insurance. Michigan is the only state to mandate that every driver purchase unlimited, lifetime medical coverage.

At a high-level, it includes many changes including eliminating the mandate that forces every Michigan driver to purchase expensive unlimited, lifetime PIP coverage. Michigan drivers can now choose the amount of PIP coverage that best meets their needs and budget. The reforms also address fee schedules for medical services, insurance rating factors and the creation of an anti-fraud unit.

The new law takes effect when your policy renews on or after July 2, 2020.

You can now select from six PIP coverage options based on your specific needs and what you can afford. However, you can select to opt out of personal injury protection medical insurance entirely if you meet certain requirements. For instance, if you have a qualified health coverage. Seniors also have the option of allowing Medicare to cover the health care expense from an auto accident. If you have Medicare or qualified health coverage, you will no longer have to pay for the PIP medical benefit. The six options are:

• Keep unlimited PIP benefit
• $500,000 PIP Benefit
• $250,000 PIP Benefit
• $50,000 PIP Benefit (must be enrolled in Medicaid)^*
• Medicare Opt-out (must be enrolled in Medicare Part A&B)^*
• Qualified Health Coverage Exclusion to $250,000 PIP Benefit^*

^*Eligibility based upon the type of health coverage that you, your spouse and all resident relatives have.

Note: Selecting new PIP coverage limits may affect your choices about other coverage, such as BI liability. Customers will need to select their PIP coverage limit by initialing and signing a selection document.

It is typically an employer-sponsored or private health plan that doesn't exclude or limit coverage for injuries related to auto-related accident and has an annual individual deductible of $6,000 (adjusted by CPI annually) or less.

You will need to seek this information from your health insurer and/or employer. Not all medical policies cover auto-related accidents. For your plan to be considered "qualified health coverage" it must not limit or exclude coverage for auto related injuries and have an individual annual deductible of $6,000 (adjusted by CPI annually) or less. You need to find out from your health insurer or employer whether your health plan is qualified health coverage for the purpose of selecting you PIP coverage. You will want to know the status of each household member's health coverage to have the most choices of PIP coverage available.

No. You will need to confirm your benefits with your health insurance provider or employer prior to making any decisions on selection of PIP coverage. Even if your health policy is qualified health coverage, you will want to take into consideration the differences between what your health policy covers and what PIP coverage provides, as well as your own needs before deciding which PIP coverage option is right for you and your family.

No. Once an insurer updates its policy (Allstate changes will go into effect with new contract changes beginning in April), if a person doesn't have an auto policy or is not a resident relative of someone who has an auto policy, they can no longer rely on PIP coverage from someone else's policy under new auto reforms that went effective in June of 2019.

Children or relatives who no longer live with you or call your home their residence, or partners of people who live together, but are not married, are not automatically covered under your PIP coverage beginning in April for new business and shortly following for renewals. Talk to your Allstate agent about the options available if you have non-relative household members.

Yes. Liability insurance covers the costs associated with injuries, death, or damage caused to another vehicle or property that you or another driver causes while driving your car. The new law requires motorists to buy significantly more bodily injury liability coverage starting July 2, 2020. Drivers will be offered a default minimum of $250,000 of coverage for one person injured or killed in an accident and $500,000 of coverage for accidents with two or more people injured or killed. Drivers will be allowed to request and receive reduced minimums as low as $50,000 per person and $100,000 per accident, by signing a BI Liability Selection form.

Not unless you choose to continue to have unlimited PIP coverage. The Michigan Catastrophic Claims Association acts as a reinsurer for auto insurers that pay claims exceeding $580,000 (adjusted upwards every other year). Until the reforms goes into effect July 2, 2020 all Michigan drivers will continue to pay the MCCA assessment.

Beginning July 2nd, drivers who choose to maintain unlimited PIP medical benefits will continue to pay the full MCCA assessment as part of their auto policy premium. For drivers who choose to no longer maintain unlimited PIP coverage, they will only have to pay the portion of the MCAA assessment that goes toward paying down MCAA deficit, if any exists. Currently, there is no deficit recoupment for the year beginning July 2, 2020 and ending June 30, 2021.

If you do not make the mandatory selection of a PIP coverage limit by signing and providing your auto insurer with a PIP coverage selection form, by law your coverage will default to unlimited and you will be charged the applicable premium

Ultimately, your premium and potential savings will depend on the PIP option you select and other coverages you choose. There is no "one size fits all" when it comes to auto insurance. What's right for you may not be right for someone else. There may be savings coming to your auto policy, but you should talk with an insurance professional to better understand how the reforms may impact your situation.

Unlimited PIP will continue to apply to any claim that occurred prior to July 2, 2020. Some of the cost saving measures in the bill, such as fee schedules, and limits on attendant care, will apply to any treatment rendered on or after July 2, 2021, in both existing and new claims.

The changes to the law are significant and complex—there is a lot of information to digest and it can be confusing. You should have a conversation with an Allstate agent to truly understand what options you have as a result of the legal reforms. The more you know, the better prepared you'll be to make an informed decision.

Starting in July 2021, there will be a fee schedule which regulates what medical providers can charge, based on the procedure they perform. This fee schedule will apply to all PIP covered treatment, under any amount of PIP coverage, including unlimited PIP coverage.

Generally, you will need to seek coverage from your health insurance or make a claim against the person at fault for causing the auto accident.

A PUP policy (commonly referred to as an umbrella policy) protects you against liability that you are found to have to another person for causing injuries and damages to the other person(s). This coverage does not pay for injuries and damages that you suffer, like PIP coverage does.

Some insurers may offer a discount if your health insurance agrees to pay for auto related injuries before PIP coverage has to pay, up to the health policy limits. This is called a 'coordinated health plan.' This saves expenses from the PIP coverage, and therefore if offered, you are eligible for 'coordinated PIP coverage' at an appropriately reduced rate. Not all auto insurers offer 'coordinated PIP coverage' under their policies.

If you are injured in an auto accident that is the fault of another driver, you will go to your PIP coverage, or your health coverage if you don't have PIP coverage or have exceeded the limit of your PIP coverage. You will also have the ability to make a claim against the person who caused the accident. If your damages exceed your PIP, and the at-fault person's BI coverage, then you may have Underinsured Motorist coverage on your own auto policy that would cover your unreimbursed damages up to the limit of that coverage.