Understanding Michigan's Medical Auto Insurance Payments

In Michigan, medical payments on auto insurance, also known as MedPay, are optional. MedPay covers medical and funeral expenses after a car accident, and it applies no matter who is at fault. It typically covers the policyholder, family members driving the car, and any passengers. MedPay coverage follows the policyholder, meaning that they are covered even when they are not in their car. In Michigan, there are six options for MedPay coverage, including unlimited coverage, $500,000, $250,000, $50,000, and no medical coverage.

Personal Injury Protection (PIP)

Prior to July 1, 2020, Michigan drivers were required to purchase unlimited PIP coverage. However, under the new auto insurance law, Michigan drivers can now choose from six PIP medical coverage levels:

• Up to $500,000 in coverage
• Up to $250,000 in coverage
• Up to $250,000 in coverage with PIP medical exclusion(s)
• Up to $50,000 in coverage (available if the named insured is enrolled in Medicaid)
• PIP medical opt-out (available if the named insured has Medicare Parts A and B)
• Unlimited PIP medical coverage (selected by default if no other option is chosen)

The PIP coverage level chosen will determine the maximum amount the auto insurance company will pay per person, per accident, for an injured person's expenses.

It is important to note that PIP does not cover certain services, such as attendant care, housing and vehicle modifications, and lost wages. Additionally, there are time limits and requirements for submitting claims and medical expenses to the insurance company to ensure coverage.

Medical Coverage Options

Michigan's auto insurance law offers several options for medical coverage. The Personal Injury Protection (PIP) Choice law allows drivers to choose a coverage level that suits their needs and budget. The law outlines six PIP medical coverage options, which are detailed below:

Unlimited PIP Coverage:

This option existed before the law change and continues to offer unlimited medical expense coverage over an injured person's lifetime. This is the default option if a specific PIP option is not chosen.

$500,000 PIP Coverage:

This option covers medical treatment and expenses up to $500,000 per person per accident. While this may seem like a large amount, it may not be sufficient for a catastrophic injury.

$250,000 PIP Coverage:

This option covers accident-related medical expenses up to a maximum of $250,000 per person per accident.

$250,000 PIP Coverage with Exclusions:

This option allows the insured person to opt out of coverage for themselves and their family members. It is available if the insured person has non-Medicare health coverage that covers auto accident injuries and/or if their household members have health insurance that will cover such injuries.

$50,000 PIP Coverage:

This option is available to those enrolled in Medicaid and their household members who have another auto insurance policy, Medicaid, or other health insurance that covers auto accident injuries.

No PIP Medical Coverage (PIP Medical Opt-Out):

This option is available to those with Medicare Parts A and B. Any household members must have another auto insurance policy or health insurance that covers auto accident injuries.

It is important to note that Michigan is a no-fault state, and these coverage options only apply to accidents occurring within the state. Additionally, the coverage levels may not be sufficient to cover all medical expenses incurred in a catastrophic accident, so it is essential to carefully consider your needs and budget when choosing a coverage option.

No-Fault Insurance

Under the No-Fault Insurance law, all drivers in Michigan are required to have the following three mandatory insurance coverages:

• Personal Injury Protection (PIP): This coverage applies to accidents occurring in the United States and Canada and may cover any injuries involving a motor vehicle. Benefits are paid by the injured person's own insurance company and can include reasonable and necessary medical expenses, up to three years of lost wages, $20 a day for services the injured person cannot perform, benefits for dependents in case of death, and funeral and burial expenses.
• Property Protection (PPI): This coverage provides protection if your car causes damage to the property of others (except moving vehicles), regardless of fault. PPI coverage is provided up to $1,000,000 and does not apply to vehicles unless they are properly parked or accidents occurring outside Michigan.
• Residual Liability: This coverage provides protection if you are sued or are legally responsible for an accident involving death, serious impairment of body function, or permanent serious disfigurement. It also covers accidents occurring outside of Michigan for property damage and bodily injury, and actual damages that exceed the amount of coverage available under Personal Injury Protection. The required limits of this coverage are up to $50,000 for one person's injury, up to $100,000 for all persons injured in one accident, and up to $10,000 for property damage. Higher limits can be purchased if desired.

In addition to these mandatory coverages, Michigan's no-fault auto insurance law also provides unlimited lifetime coverage for medical expenses resulting from auto accidents. This means that there is no cap on the amount of medical expenses that will be covered if you are injured in a car accident.

Recent changes to the No-Fault Insurance law in Michigan have given drivers more choices and flexibility in their insurance coverage. For example, drivers can now choose different levels of PIP coverage, including waiving PIP coverage altogether, depending on their personal and family situations. These changes were implemented to provide financial relief to Michigan drivers and make no-fault auto insurance more affordable.

Health Insurance

In Michigan, health insurance can be coordinated with auto insurance to provide comprehensive protection in the event of a car accident. This coordination of benefits ensures that medical bills resulting from an auto accident are paid by the appropriate insurer. If an individual has coordinated auto insurance, their health insurance becomes the primary payer, covering medical expenses initially, and once the health insurance coverage limit is reached, the auto insurance kicks in to provide additional financial support.

On the other hand, uncoordinated auto insurance takes priority over health insurance. In this case, the auto insurance policy serves as the primary source of payment for accident-related medical costs. This type of coordination is recommended by legal professionals as it ensures that health insurance does not become the primary payer for auto accident injuries.

It is worth noting that health insurance policies may vary in their coverage of injuries related to car accidents. Some health insurance plans might exclude such injuries from their coverage, leaving individuals with high out-of-pocket expenses. This is where medical payments coverage (MedPay) comes into play. MedPay is an optional form of auto insurance that specifically covers medical and funeral expenses resulting from a car accident. It typically applies regardless of who is at fault in the accident and covers the policyholder, family members driving the car, and passengers. MedPay can be used for reimbursement of medical expenses or added to an existing health insurance policy, depending on the insurance company and the state's regulations.

In Michigan, individuals have the option to choose their level of Personal Injury Protection (PIP) within their auto insurance plan. PIP covers medical expenses if an individual is injured in an automobile accident. Before the recent changes in Michigan's auto insurance laws, PIP was a mandatory state-required charge with unlimited coverage. However, the new legislation allows individuals to choose from different PIP coverage levels, including waiving PIP coverage altogether, depending on their personal circumstances and whether they have qualified health coverage.

It's important to carefully consider all options and coordinate health insurance and auto insurance to ensure adequate financial protection in the event of a car accident. Consulting with insurance agents and legal professionals can help individuals make informed decisions about their coverage needs.

Primary and Secondary Coverage

In Michigan, drivers are required to have no-fault automobile insurance. This includes Personal Injury Protection (PIP), Property Protection Insurance (PPI), and Residual Bodily Injury and Property Damage Liability (BI/PD).

Coordinated Benefits

Coordinated benefits are optional for drivers in Michigan and for auto insurance companies, as they are not required to offer this option. With coordinated benefits, the driver's health insurance is primarily responsible for covering medical expenses related to a car accident. Once the health insurance plan's coverage limit has been reached, the No-Fault auto insurance becomes the secondary payer. This option results in reduced auto insurance premiums but also reduced coverage in the event of an accident.

Uncoordinated Benefits

If a driver chooses uncoordinated benefits, their No-Fault auto insurance becomes the primary payer for car accident-related medical expenses. This means that their No-Fault insurance will pay for all accident-related medical care, treatment, and services, even if these could be covered by their health insurance provider. Uncoordinated benefits provide more comprehensive coverage in the event of an accident but at a higher cost, as auto insurance premiums are not reduced.

It is important to note that Medicare and Medicaid cannot be coordinated with No-Fault auto insurance in Michigan due to federal law. Additionally, employer-provided health insurance can be coordinated as long as it is not a self-funded ERISA plan with a specific coordination of benefits clause.

Frequently asked questions