Orlando Harmon
Michigan's No-Fault Insurance law was passed in 1973 to ensure that car accident victims receive prompt assistance without regard to fault. Under this law, drivers are required to have Personal Injury Protection coverage, which provides benefits such as medical expenses and lost wages. However, in 2019, significant changes were made to the No-Fault law, including the introduction of PIP Choice, allowing drivers to choose their coverage level. These reforms have affected the rights and options of both drivers and accident victims in Michigan, and while the state is no longer considered a pure no-fault state, it still operates under a modified version of the No-Fault Insurance system.
| Characteristics | Values |
|---|---|
| Status of No-Fault Insurance in Michigan | No longer a pure no-fault state after an amendment to the No-Fault Law in May 2019 |
| Previous Status | A no-fault state for car accidents |
| Reason for Change | To address challenges faced by drivers when purchasing insurance and accident victims seeking benefits |
| Impact | Affects every driver and car accident victim in Michigan |
| Key Changes | PIP Choice, opt-outs, attendant care limits, a fee schedule, and increased bodily injury liability coverage |
| No-Fault Insurance Requirements | Mandatory car insurance for anyone who drives regularly in Michigan |
| Coverage | Medical bills, lost wages, and reasonable and necessary medical expenses |
| Coverage Limits | Drivers can choose from $50,000 (for those on Medicaid), $250,000, $500,000, or unlimited coverage |
| Excess Medical Expenses | Drivers can sue the at-fault driver in a third-party tort lawsuit for "excess" medical bills beyond their PIP coverage |
| Mini Tort | Maximum recovery amount increased from $1,000 to $3,000 for accidents after July 1, 2020 |
| Qualified Health Coverage | Drivers may need qualified health coverage to select certain coverage levels and options available after July 1, 2020 |
| Attendant Care | Auto insurance companies limited to paying for 56 hours per week for in-home, family-provided attendant care after July 1, 2021 |
| Michigan Catastrophic Claims Association (MCCA) | Pays for medical costs of catastrophically injured accident victims with policies issued or renewed before July 2, 2020; for later policies, MCCA pays only if "unlimited" coverage was selected |
| Prohibited Factors for Insurance Rates | Sex, marital status, home ownership, education level, occupation, postal zone, and credit score (effective July 1, 2020) |
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What You'll Learn
Michigan is no longer a pure no-fault state
However, under the amended law, the other driver may be responsible for up to $3,000 of collision damages. This is referred to as a mini-tort claim under the no-fault law. The maximum mini tort recovery amount increased from $1,000 to $3,000 for car accidents after July 1, 2020.
The Michigan No-Fault Insurance law was designed to help people injured in car accidents. It ensures that victims get prompt assistance without regard to fault. If injured in an accident, your auto insurance company pays for medical bills and lost wages regardless of who caused the crash. Before the Michigan No-Fault insurance law was passed in 1973, the state had been a tort liability state. The previous system was hurting car accident victims, denying or under-compensating them, and causing lengthy delays that resulted in devastating financial burdens.
The Michigan auto insurance reform has brought about significant changes to the No-Fault law, affecting every driver and car accident victim in the state. These changes include PIP choice, opt-outs, attendant care limits, a fee schedule, and increased bodily injury liability coverage. Drivers now have a choice of four No-Fault PIP medical benefits coverage levels: $50,000 for drivers enrolled in Medicaid, $250,000, $500,000, or unlimited coverage. These new coverage options became available in policies issued or renewed after July 1, 2020. Additionally, drivers who have Medicare can opt out of No-Fault PIP medical benefits altogether.
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PIP choice and coverage levels
Personal Injury Protection (PIP) Choice was introduced in Michigan in 2019, allowing drivers to choose a coverage level appropriate for their needs and budget. Before this, Michigan's no-fault auto insurance laws required all drivers to carry unlimited personal injury protection (PIP) insurance coverage.
The new law requires that auto insurance companies and agents give policyholders forms that describe the benefits and risks of the coverage options. Drivers may also want to talk with an auto insurance agent, insurance company, or financial advisor to discuss their personal auto insurance needs.
There are six PIP medical coverage levels available to Michigan drivers. These levels represent the most a driver’s auto insurance company will pay per person per accident for an injured person’s expenses under PIP medical coverage. The levels are:
- Up to $50,000: If you’re enrolled in Medicaid and your household includes a non-Medicaid recipient with an auto insurance policy, you may purchase a less expensive PIP policy with up to $50,000 in coverage.
- Up to $250,000, with exclusions: If you have non-Medicare health coverage that provides injury benefits for you and your household after a collision, you can select this limited PIP coverage option. Some individuals may be excluded from PIP coverage under this plan as long as they have Qualified Health Coverage, but not Medicare.
- Up to $250,000 or $500,000: Anyone can purchase a policy with up to $250,000 or $500,000 in PIP insurance coverage.
- Unlimited coverage: Michigan drivers may also purchase unlimited PIP insurance policies.
If drivers choose to opt out of PIP medical, the entire PIP medical portion of their premium will be eliminated but excluded members will have no PIP medical coverage under the policy.
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Mini tort claims
Michigan's No-Fault Insurance law was designed to help people injured in car accidents. The law ensures that car accident victims receive prompt assistance without regard to fault. Under this law, if you are injured in a car accident, your auto insurance company will pay for your medical bills and lost wages, regardless of who caused the crash.
The No-Fault Insurance law was passed in 1973, and in 2019, the Legislature made changes to the auto insurance law, allowing PIP Choice for the first time. These changes came into effect on July 1, 2020, and drivers now have a choice between "unlimited" coverage and capping their coverage at $50,000 (if enrolled in Medicaid), $250,000, or $500,000.
Now, onto Mini Tort claims. A Mini Tort claim in Michigan allows an auto accident victim to recover a maximum of $3,000 for vehicle damage from the at-fault driver or their insurance company. This law only covers vehicle damage and does not apply to injuries. The Mini Tort law change, which occurred on July 2, 2020, increased the maximum recovery amount from $1,000 to $3,000 for car accidents after July 1, 2020.
To file a Mini Tort claim in Michigan, you must be "'less than 50% at fault' for the accident. You will need to obtain the necessary information from the at-fault driver, including their name, address, and insurance information. It is also recommended to take photos of the damage to your car and include your license plate to confirm ownership. If you have collision coverage, the Mini Tort will likely cover your deductible. However, if you don't have collision coverage, the Mini Tort will be your only source of recovery for vehicle damage repairs.
It is important to note that if you were uninsured at the time of the accident, you will be unable to file a Mini Tort claim. Additionally, if the vehicle damage exceeds $3,000, the other driver will need to turn to their own insurance company to pay the excess repair costs, assuming they have collision coverage.
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Attendant care limits
No-Fault Insurance in Michigan is a unique system that ensures car accident victims receive the help they need, regardless of who is at fault. The Michigan No-Fault Insurance law was passed in 1973 and has undergone several changes since then, with the most recent updates taking effect in 2020. Under this law, drivers in Michigan are required to have certain mandatory insurance coverages, including Personal Injury Protection (PIP).
One of the benefits covered by Michigan No-Fault Personal Protection Insurance is attendant care services, which help car accident victims with their "activities of daily living" while they recover from their injuries. Attendant care can be provided by a nurse or a family member, and it is covered by the No-Fault PIP medical benefits up to a certain limit.
The 2019 No-Fault law (Public Act 21 of 2019) introduced a significant change to attendant care limits. Effective July 1, 2021, auto insurance companies are not required to pay for more than 56 hours per week of in-home, family-provided attendant care for car accident victims. This limitation applies when the care is provided by or through an individual related to the victim, someone who lives in the victim's household, or someone with whom the victim had a prior business or social relationship.
It is important to note that this 56-hour limit does not apply to services provided in a facility or by a nurse or home health aide from a commercial agency. Additionally, car accident victims can contract with their auto insurance company to pay for attendant care beyond the 56-hour weekly limit for in-home, family-provided care.
While the 2019 changes restricted the amount of attendant care covered by insurance when provided by a family member, it is worth mentioning that Michigan's No-Fault Insurance law still provides unlimited lifetime coverage for medical expenses resulting from auto accidents.
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Prohibited factors for setting insurance rates
Michigan's No-Fault Insurance law was passed in 1973 to protect those injured in car accidents. The law ensures that victims receive prompt assistance without regard to fault. Under this law, a person's auto insurance company pays for their medical bills and lost wages, regardless of who caused the accident.
In 2019, Governor Whitmer signed bipartisan no-fault auto insurance reform legislation to provide insurance coverage options, lower rates for Michigan drivers, and strengthen consumer protections. This legislation included prohibitions on certain factors that could be used to set insurance rates.
- Gender: Michigan law prohibits the use of gender as a factor in setting car insurance rates.
- Credit score: Credit scoring, or the use of a person's credit history, is not allowed as a rate-setting factor in Michigan.
- Marital status: Michigan law prohibits the use of marital status as a factor in setting insurance rates.
- Homeownership: The new law prohibits the use of homeownership status in setting insurance rates.
- Education level: Michigan law prohibits the use of education level as a factor in setting insurance rates.
- Occupation: Occupation is also prohibited as a factor when setting insurance rates in Michigan.
- ZIP code: Insurers are prohibited from using a person's ZIP code or postal zone as a factor when setting insurance rates.
These prohibited factors aim to promote fairness in insurance rate-setting and prevent discrimination based on non-driving-related characteristics. It's important to note that insurers may still use certain geographic or behavioral data that indirectly reflect these factors, which can result in rate variations between regions and demographics.
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Frequently asked questions
No, Michigan is no longer a pure no-fault state with respect to auto insurance benefits. After an amendment to the No-Fault Law in May 2019, the rules regarding available coverage and benefits were significantly changed.
The Michigan No-Fault Insurance law was passed by lawmakers in 1973. It required all drivers to carry "unlimited" No-Fault medical coverage to protect them and their families in case they were injured in a car accident.
The Michigan No-Fault Insurance reform, which came into effect on June 11, 2019, brought about significant changes. These include giving drivers a choice of four No-Fault PIP medical benefits coverage levels, allowing drivers with Medicare to opt out of No-Fault PIP medical benefits, and limiting the number of hours of in-home attendant care that auto insurance companies will pay for.
