Michigan's Auto Insurance Reform: What's New?

Michigan's new auto insurance law, which came into effect on July 1, 2020, has brought about sweeping changes to the state's No-Fault law, giving drivers more choices and lower-cost insurance options. The reform includes PIP choice, opt-outs, attendant care limits, a fee schedule, and increased bodily injury liability coverage. It is essential for all drivers to understand how the reform may have changed their legal rights and their ability to recover No-Fault PIP benefits after a car crash.

New personal injury protection (PIP) coverage options

Michigan's new auto insurance law has brought about several changes to the state's No-Fault law, including new personal injury protection (PIP) coverage options. Here are the key details you need to know about the new PIP coverage choices:

New PIP Coverage Options:

• Unlimited Coverage: This option provides the same comprehensive protection as the previous default coverage in Michigan. It ensures that injured drivers will have their medical expenses covered regardless of the cost.
• Up to $500,000 in Coverage: Drivers can choose this option to have up to $500,000 of personal injury protection. This option offers a balance between adequate coverage and reduced premiums.
• Up to $250,000 in Coverage: This choice provides drivers with up to $250,000 in PIP coverage. It is a more affordable option for those who want peace of mind without breaking the bank.
• Up to $250,000 in Coverage with Exclusions: This option allows for up to $250,000 in PIP coverage, but some or all persons may be excluded from PIP medical benefits. This exclusion applies if the individual has qualified health insurance that does not exclude auto injuries and has a deductible of $6,000 or less.
• $50,000 in Coverage for Medicaid Enrollees: Individuals enrolled in Medicaid and meeting specific eligibility criteria can choose this option to receive $50,000 in PIP coverage.
• PIP Medical Opt-Out: Individuals with Medicare Parts A and B who meet certain eligibility criteria can choose to opt out of PIP medical coverage entirely. However, they should be aware that if they are injured in an accident, their medical bills will not be covered by No-Fault insurance.

These new PIP coverage options took effect on July 2, 2020, and drivers in Michigan are encouraged to review their coverage choices and select the option that best suits their needs and budget. It is important to note that if a driver does not actively choose a different PIP option, their coverage will default to the unlimited coverage option, which may result in higher premiums.

Increased state minimums for underinsured motorist coverage

Michigan's new auto insurance law has brought about significant changes to the state's No-Fault law, which will impact every driver and car accident victim in the state. One of the most notable changes is the introduction of increased state minimums for underinsured motorist coverage.

Previously, Michigan was one of the few states that did not require drivers to carry underinsured motorist coverage. However, under the new reform, drivers are now required to carry bodily injury liability insurance with minimum coverage of $250,000 per person and $500,000 per accident. This coverage provides protection in the event that a driver causes a car accident that injures or takes the life of another person. While this is the new state minimum, drivers have the option to purchase lower limits of $50,000 per person and $100,000 per accident, or higher limits for additional protection.

The increased state minimums for underinsured motorist coverage are designed to provide better financial protection for drivers and accident victims. In the past, the state's minimum coverage limits might not have been sufficient to cover the medical expenses and property damage resulting from a serious car accident. With the new minimums in place, drivers can have peace of mind knowing that they have more robust coverage in the event of an accident.

It is important to note that these changes will only apply to policies issued or renewed after July 1, 2020. Drivers should review their current policies and contact their insurance providers to ensure they have the appropriate coverage and understand their options under the new law.

In addition to the increased state minimums for underinsured motorist coverage, the new auto insurance reform in Michigan includes a range of other changes, such as PIP choice, opt-outs, attendant care limits, and a fee schedule. These changes are intended to lower costs for Michigan drivers, maintain the highest coverage options in the country, and strengthen consumer protections.

Changes to bodily injury liability coverage

Michigan's new auto insurance law has brought about significant changes to the state's No-Fault law, including increased bodily injury liability coverage. Here are the key details about the changes to bodily injury liability coverage:

Increased Bodily Injury Liability Coverage:

• Starting on July 2, 2020, Michigan drivers were required to carry bodily injury liability insurance to provide financial protection in the event they caused a car accident that injured or took the life of another person.
• The mandatory minimum coverage limits are $250,000 per person and $500,000 per accident. This is a significant increase from the previous minimum requirements.
• Drivers have the option to purchase lower limits of $50,000 per person and $100,000 per accident for this third-party insurance.
• These changes give Michigan drivers more flexibility in choosing their insurance coverage while also ensuring that individuals injured in car accidents have access to adequate financial compensation.
• The increased bodily injury liability coverage is part of a broader set of reforms aimed at lowering insurance rates, maintaining high coverage options, and strengthening consumer protections.
• It is important for drivers to understand these changes and how they may impact their insurance choices and financial responsibilities in the event of a car accident.

The changes to bodily injury liability coverage in Michigan's auto insurance reform provide drivers with more options while also ensuring that individuals injured in car accidents have access to sufficient financial resources for their medical needs and other related expenses. These reforms are designed to balance the needs of drivers for affordable insurance with the need to protect individuals and their families from the financial consequences of car accidents.

A fee schedule for doctors, hospitals, and other medical providers

On July 1, 2021, a new Medicare-based fee schedule was introduced in Michigan, which doctors, hospitals, clinics, and other medical providers must adhere to when charging for services provided to car accident victims. This is a significant change for medical providers as they will now have to conform their charges for services to this new fee schedule.

The new fee schedule is part of the broader Michigan No-Fault Reform, which was enacted through Public Acts 21 and 22 of 2019 and came into effect on June 11, 2019. The reform brought about sweeping changes to Michigan's No-Fault law, affecting every driver and car accident victim in the state. One of the key changes was the introduction of a fee schedule for medical providers, which came into effect on July 1, 2021.

The fee schedule applies to new and existing claims for treatment rendered after July 1, 2021. However, it is important to note that absent additional guidance from the Michigan Supreme Court, the fee schedule may not be applied to claims related to persons injured in accidents that occurred before June 11, 2019.

The Michigan No-Fault Reform also introduced a range of other changes, including PIP choice, opt-outs, attendant care limits, and increased bodily injury liability coverage. These changes have provided Michigan drivers with more choices and lower-cost insurance options. It is essential that all drivers and car accident victims understand how these reforms may have changed their legal rights and the impact on their ability to recover No-Fault PIP benefits after a car crash.

A ban on using non-driving-related factors to set car insurance prices

Michigan's new auto insurance law, which came into effect on July 1, 2020, includes a ban on using non-driving-related factors to set car insurance prices. This is a significant change that will affect all drivers in Michigan and is intended to lower costs and strengthen consumer protections.

The reform prohibits car insurance companies from using the following non-driving-related factors to set car insurance prices: sex, marital status, home ownership, education level, occupation, postal zone, and credit score. This change ensures that car insurance prices are based solely on factors related to an individual's driving record and experience.

The reform also introduces new choices for Personal Injury Protection (PIP) coverage levels, giving drivers more flexibility in choosing the option that best suits their needs and budget. Drivers can now choose from six different PIP coverage levels, including unlimited coverage, $500,000, $250,000, or lower coverage with certain exclusions, or they can opt out of PIP medical coverage if they have Medicare.

These changes to Michigan's auto insurance law provide drivers with more options and lower-cost insurance plans. It is important for drivers to understand these changes and how they can impact their coverage and budget. They should review the new PIP coverage options with their insurance agents to make informed decisions about their auto insurance.

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