Paul Sanchez
Michigan's No-Fault Insurance law was designed to help people injured in car accidents. It is a unique system that ensures victims get the help they need promptly and without regard to fault. In May 2019, the Michigan Legislature passed sweeping changes to the state's auto no-fault law, which was then signed into law by Governor Whitmer. This legislation changes how the Michigan no-fault insurance system operates and will affect every resident in the state. The new law gives drivers the option to choose different PIP coverage levels and opt out of No-Fault medical coverage if they have Medicare. It also introduces a fee schedule and increases bodily injury liability coverage. These changes present challenges for drivers when purchasing insurance and for victims seeking benefits and protections.
| Characteristics | Values |
|---|---|
| Date of Changes | May 2019 |
| Who Passed the Changes | Michigan Legislature |
| Who Signed the Changes into Law | Governor Whitmer |
| Who is Affected | Every resident in the state |
| PIP Choice | Drivers must select whether they wish to continue with "unlimited" coverage or whether they'd like to cap their coverage at $50,000 (if they are enrolled in Medicaid), $250,000 or $500,000 |
| Opt-out | Drivers on Medicare can opt out of PIP medical benefits coverage |
| Attendant Care | Auto insurance companies will not be obligated to pay for more than 56 hours per week of in-home, family-provided attendant care |
| Fee Schedule | Doctors, hospitals, clinics, and other medical providers will have to conform their charges for medical care to a new Medicare-based fee schedule |
| Bodily Injury Liability Coverage | Drivers will be required to carry bodily injury liability insurance in the amounts of $250,000 and $500,000, but they will have the option to purchase lower limits of $50,000 and $100,000 |
| Mini Tort | The maximum recovery amount for car accident-related vehicle damage under Michigan's mini tort law will increase from $1,000 to $3,000 for car accidents after July 1, 2020 |
| "Excess" Medical Expenses | Car accident victims whose accident-related medical bills exceed the relevant No-Fault PIP medical benefits coverage level will be able to sue the at-fault driver in a third-party tort lawsuit for payment of present and future "excess" medical bills |
| Michigan Catastrophic Claims Association | The MCCA will pay for the medical costs of catastrophically injured car accident victims who are claiming medical benefits through a No-Fault auto insurance policy issued or renewed before July 2, 2020. For policies issued or renewed after July 1, 2020, the MCCA will only pay if "unlimited" was the No-Fault PIP medical benefits coverage level selected |
| Michigan Assigned Claims Plan | Car accident victims who must claim Michigan No-Fault insurance benefits through the Michigan Assigned Claim Plan will be subject to a cap of $250,000 on medical benefits |
What You'll Learn
PIP Choice
Michigan's no-fault insurance law has undergone significant changes, including the introduction of PIP Choice, which offers drivers more flexibility in their Personal Injury Protection (PIP) coverage.
When selecting their desired level of PIP coverage, drivers must consider their health insurance coverage and that of their family members. For example, to be eligible for the $50,000 PIP coverage, drivers must be enrolled in Medicaid, and their spouse and other relatives living with them must have either Medicaid or qualified health coverage. On the other hand, drivers can opt out of PIP coverage entirely if they, their spouse, and all relatives living with them have Medicare or qualified health coverage.
Impact of PIP Choice
The introduction of PIP Choice is expected to lower insurance premiums for Michigan drivers. Insurance companies are required to reduce the premium customers pay based on their chosen level of PIP coverage. The amount of reduction will depend on the selected coverage level, with higher coverage resulting in lower reductions. Additionally, the new law prohibits insurance companies from using certain non-driving-related factors, such as sex, marital status, and occupation, to set insurance rates.
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Opt-out of No-Fault medical coverage
Michigan's No-Fault insurance law was designed to help people injured in car accidents. The law ensures that car accident victims get the help they need promptly and without regard to fault.
As of July 1, 2020, individuals who are covered by Medicare Parts A and B can opt out of Personal Injury Protection (PIP) medical coverage entirely, as long as certain conditions are met. This option is also referred to as "Limited PIP Medical Coverage of $250,000 with Exclusions."
To opt out of PIP medical coverage, the policyholder must have their own "qualified health coverage" that covers auto accident injuries. This can include private health insurance or a different Michigan No-Fault policy with PIP medical coverage. Additionally, the annual individual deductible for the health care plan must be $6,000 or less.
It is important to note that if a policyholder chooses to opt out of PIP medical coverage, No-Fault will not pay for any accident-related medical bills. Instead, it is expected that these individuals will turn to Medicare for medical coverage for injuries suffered in a car accident.
The option to opt out of No-Fault medical coverage is one of several significant changes to Michigan's No-Fault law, which now allows drivers to choose from different levels of PIP coverage. These changes were enacted to reduce the financial burden on drivers and improve accountability.
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Attendant care limits
The Michigan No-Fault Insurance law was designed to help people injured in car accidents. The law is unique in that it ensures victims get the help they need promptly and without regard to fault.
The Michigan No-Fault law has undergone significant changes, including to attendant care. Under the new law, auto insurance companies are not obligated to pay for more than 56 hours per week of in-home, family-provided attendant care. This limitation does not apply to services provided in a facility or by a nurse or home health aide from a commercial agency.
The new law took effect on June 11, 2019, and the attendant care limits came into force on July 1, 2021. The limitation applies to caregivers who are related to the injured person, live in the same household, or had a business or social relationship with the injured person before the injury.
The new law also allows insurance companies to contract with family members or caregivers to provide care exceeding the 56-hour cap. This is because in-home, family-provided services are often significantly less expensive than the commercial rate charged by agencies.
The new restrictions on attendant care do not apply retroactively. This means that auto insurance companies will likely begin applying the 56-hour cap retroactively to car accident victims whose injuries and auto insurance policies predate the new law.
The new law also requires insurance companies to offer a rider that will provide coverage for attendant care in excess of an insured person's Personal Injury Protection (PIP) limit. This rider must be offered to anyone choosing a policy with PIP medical limits of $50,000, $250,000, or $500,000.
The only way to ensure coverage of all reasonable and necessary accident-related expenses is to choose a Michigan No-Fault policy with unlimited lifetime Personal Injury Protection (PIP) medical benefits.
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Fee schedule
The Michigan No-Fault fee schedule refers to a series of reimbursement limitations set forth in the amended version of the No-Fault Act for treatment rendered to individuals relative to injuries sustained in an auto accident for which they are eligible for no-fault benefits. The fee schedule is a series of "caps" on provider reimbursement, rather than a series of guaranteed payments by no-fault insurers.
The fee schedule applies to "a physician, hospital, clinic, or other person" that "renders treatment or rehabilitative occupational training to an injured person for an accidental bodily injury covered by personal protection insurance." It does not apply to "emergency medical services rendered by an ambulance operation."
The fee schedule took effect on July 2, 2021, and applies to treatment or rehabilitative occupational training rendered after that date. It is primarily governed by the amended version of the No-Fault Act, which became effective when Public Act 21 was signed into law on June11, 2019.
The reimbursement rates under the Michigan No-Fault medical fee schedule include:
- A 56 hours-per-week limit on in-home, family-provided attendant care
- A 190% limit on the Medicare rate for covered treatment
- A 52.5% limit on providers' 2019 rates for non-covered treatment
The fee schedule has negatively impacted victims and the medical professionals and caregivers who care for them. Victims don't have the resources to pay for and obtain the care and treatment essential to their recovery, and many providers have stopped accepting auto accident cases or have been driven out of business. On the other hand, insurance companies have profited from the fee schedule, as it allows them to pay out less money on claims and keep more of their insureds' premium dollars.
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Increased bodily injury liability coverage
Michigan's No-Fault insurance law was designed to help people injured in car accidents. The law ensures that car accident victims get the help they need promptly and without regard to fault.
The Michigan No-Fault insurance law has undergone significant changes, including increased bodily injury liability coverage. Starting on July 2, 2020, drivers are required to carry bodily injury liability insurance in the amounts of "not less than $250,000 because of bodily injury to or death of 1 person in any 1 accident" and "not less than $500,000 because of bodily injury to or death of 2 or more persons in any 1 accident." This is a significant increase from the previous minimum coverage limits of $20,000 per person and $40,000 per accident.
The new law provides drivers with more choices and flexibility when it comes to their auto insurance coverage. While the minimum coverage limits have increased, drivers now have the option to purchase lower limits of $50,000 and $100,000 for bodily injury liability insurance. This change gives drivers the ability to choose a coverage level that is appropriate for their needs and budget.
It is important to note that the extent of coverage depends on the policy limit selected. Bodily injury liability insurance covers the policyholder's liability for the injured person's pain and suffering, excess medical benefits, lost wages, and other economic damages.
In Michigan, bodily injury liability insurance is also referred to as "residual liability insurance" under the No-Fault law. This insurance coverage is mandatory for anyone who drives regularly in the state. By having this insurance, drivers are protected in case they are sued for causing a car accident that injured or killed another person.
The increased bodily injury liability coverage is a significant change in Michigan's No-Fault insurance law, providing drivers with more options while also ensuring that those injured in car accidents receive the necessary compensation and benefits.
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Frequently asked questions
In May 2019, the Michigan Legislature passed sweeping changes to the state's auto no-fault law, which was then signed into law by Governor Whitmer. The new law affects every driver and car accident victim in the state and changes how the Michigan no-fault insurance system operates.
The changes include PIP choice, opt-outs, attendant care limits, a fee schedule, and increased bodily injury liability coverage.
The changes present challenges for drivers when they are purchasing car insurance. 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.
Car accident victims will be affected by the changes when they are seeking the benefits and protections provided by the No-Fault law.
