Michigan Insurance: Change Date

On July 1, 2020, Michigan's new auto insurance law came into effect, giving drivers more options and lower-cost insurance alternatives. The legislation, which was signed by Governor Whitmer, is intended to lower expenses for Michigan drivers while maintaining the highest coverage options and strengthening consumer protections in the country.

The new law offers a variety of coverage options, including unlimited lifetime PIP medical benefits, and allows drivers to reduce their premiums for the medical portion of PIP by relying on their own health insurance. It also prohibits auto insurance companies from using certain non-driving factors, such as gender, marital status, occupation, and education, to set car insurance rates.

The changes to Michigan's No-Fault law are significant and will impact every driver and car accident victim in the state. It is important for motorists to understand the new law and make informed choices about their coverage options to protect themselves and their families.

Michigan's new auto insurance law

On July 1, 2020, Michigan's new auto insurance law came into effect, introducing sweeping changes to the state's previous auto insurance requirements. The new law gives Michigan drivers new choices and lower-cost insurance options.

The Old Law

Under the old law, Michigan required all drivers to carry "unlimited" No-Fault medical coverage to protect them and their families in the event of injuries sustained in a car accident. This coverage guaranteed many health and recovery benefits to injured drivers, including reimbursement for lost wages, in-home nursing care, and specialized medical treatments.

The New Law

The new law replaces the mandatory comprehensive lifetime No-Fault personal injury protection (PIP) insurance coverage with a tiered system, allowing individuals to opt out or purchase as little as $50,000 worth of PIP coverage for medical expenses under certain circumstances. The other options include $250,000, $500,000, and No-Limit.

The new law also introduces the following changes:

• Increased liability coverage: 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.
• Bodily Injury Coverage: All motorists must purchase a minimum amount of bodily injury coverage. This coverage is the amount an insurance company will cover the driver and owner of a motor vehicle who negligently injures another person.
• Uninsured Motorist & Underinsured Motorist Coverage: This coverage protects anyone hit by a driver without insurance or without sufficient insurance to cover damages.
• Prohibited Factors for Setting Car Insurance Rates: Michigan No-Fault car insurance companies are prohibited from using the following non-driving-related factors to set car insurance prices for drivers: sex, marital status, home ownership, education level attained, occupation, the postal zone in which the insured resides, and credit score.
• Mini Tort: The maximum recovery amount for car accident-related vehicle damage under Michigan's mini tort law has increased from $1,000 to $3,000 for car accidents after July 1, 2020.
• Managed Care Option: This option would impose insurance company-mandated limitations on doctor and treatment options.
• Coordination of Benefits Option: Motorists can select deductibles and exclusions reasonably related to other health and accident coverage.

Impact of the New Law

The new law has resulted in lower insurance costs for Michigan drivers, with insurance companies required to reduce the cost of the PIP portion of car insurance. However, it is important to note that the mandated savings do not apply to the entire policy but only to the PIP portion of the total insurance cost.

The new law also has implications for motorcycle riders, pedestrians, and bicyclists, as the amount of No-Fault benefits available to them has changed.

Overall, the new auto insurance law in Michigan provides drivers with more choices and the potential for lower insurance costs, but it is crucial to understand the implications of the different coverage options to make informed decisions.

Personal Injury Protection (PIP) Choice

On May 30, 2019, Governor Whitmer signed historic bipartisan no-fault auto insurance reform legislation to lower costs for Michigan drivers, maintain the highest coverage options in the country, and strengthen consumer protections. The Personal Injury Protection (PIP) Choice was introduced as part of this legislation, allowing drivers to choose a coverage level that suits their needs and budget. This was implemented because mandatory unlimited Personal Injury Protection (PIP) medical benefits were too expensive for many Michigan families.

PIP medical coverage pays for allowable expenses for medical care, recovery, and rehabilitation if you are injured in an auto accident. It also covers some funeral expenses. Michigan is the only state where unlimited PIP medical coverage continues to be an option.

There are six PIP medical coverage levels available to Michigan drivers:

• 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
• PIP medical opt-out
• Unlimited PIP medical coverage

If a PIP medical option is not chosen by the insured, the unlimited PIP medical option is selected by default.

Under certain circumstances, drivers may choose to opt out of PIP medical coverage entirely or exclude specific household members. If drivers opt out of PIP medical, the entire PIP medical portion of their premium will be eliminated, but excluded members will not have any PIP medical coverage under the policy.

Insurance companies are required to reduce statewide average PIP medical premiums for eight years. Drivers' premiums will depend on their individual circumstances and the coverage they select.

Bodily injury liability 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 bodily injury liability coverage.

Under the new law, bodily injury liability coverage is now mandatory for all drivers in Michigan. The minimum required coverage limits are $50,000 per person who is injured or killed in an accident and $100,000 for each accident if multiple people are injured or killed. Additionally, there is a requirement for $10,000 in property damage coverage for accidents that occur in another state. These minimum coverage limits are designed to provide a basic level of protection for drivers, but it is recommended that drivers consider purchasing higher coverage limits to ensure adequate protection.

While the minimum coverage limits are mandatory, drivers do have the option to purchase higher coverage limits. The state of Michigan recommends coverage limits of $250,000 per person and $500,000 per accident. These higher coverage limits provide additional financial protection for drivers and can help to reduce the risk of being sued for medical expenses resulting from a car crash. It is important to note that if a driver chooses to purchase coverage limits lower than the recommended levels, they will be required to sign a waiver.

The introduction of bodily injury liability coverage is a significant change for Michigan drivers, as it marks the first time in almost 50 years that drivers can be held financially responsible for the medical expenses they cause following a car crash. Previously, Michigan's No-Fault law protected drivers from being sued for medical expenses, but the new law removes this protection. As a result, it is crucial for drivers to carefully consider their coverage limits and ensure they have adequate protection in the event of an accident.

In conclusion, bodily injury liability coverage is an essential component of auto insurance in Michigan. By understanding the coverage limits and their potential financial risks, drivers can make informed decisions about their insurance choices and ensure they have the necessary protection in the event of a car accident.

Mini tort

Michigan's Mini-Tort law allows victims of auto accidents to recover a maximum of $3,000 for vehicle damage from the at-fault driver. This law is separate from any insurance claims and is like a small civil suit. It is important to note that the law only covers vehicle damage and not injuries.

The at-fault driver's insurance company is responsible for paying up to $3,000 in vehicle damage. The amount paid out depends on the percentage of fault in the accident. For example, if the damage to your car is $100 and the other driver is deemed 75% at fault, their insurance company will pay $75. You will be responsible for the remaining $25.

Mini-Tort Claim Requirements

To file a Mini-Tort claim, you must meet the following requirements:

• You must not be more than 50% at fault.
• Your vehicle must have physical damage.
• Your vehicle must be covered by Michigan No-Fault insurance.
• The at-fault driver must be identified.
• Your insurance company does not cover the damages to your vehicle.

Mini-Tort Claim Process

To file a Mini-Tort claim, you will need to provide the following documentation:

• A police report showing that the other driver was cited for hazardous action.
• A repair estimate from a licensed body shop or dealership.
• A copy of your auto declaration showing that you are responsible for your deductible.

Once you have gathered the required documentation, you can write a letter to the at-fault driver's insurance company requesting reimbursement for your vehicle damage. Include the police report, your insurance declaration, and the repair estimate in your letter.

It is important to note that you have three years from the date of the accident to file a Mini-Tort claim. These cases typically fall under small claims court, but either party can request to move the case to a higher jurisdiction.

Qualified Health Coverage (QHC)

On July 1, 2020, Michigan's new auto insurance law came into effect, offering drivers new options and lower-cost insurance. The law allows drivers to opt out of buying Personal Injury Protection (PIP) as part of their auto insurance, but only if their health insurance policy covers auto injuries and has a deductible of $6,000 or less. This health insurance policy is referred to as Qualified Health Coverage (QHC).

QHC is important because without it, drivers will be unable to take advantage of the insurance options under the Michigan No-Fault Insurance law, which allows drivers to pay less for insurance by receiving less coverage.

QHC is defined in two ways:

• It is "health or accident coverage" that "does not exclude or limit coverage for injuries related to motor vehicle accidents" and its "annual deductible for coverage" must be "$6,000 or less per individual."
• Or it is Medicare coverage.

To confirm that your health insurance coverage meets the requirements under the No-Fault law, ask for documentation from your health insurer. They are required to prepare and provide this documentation.

Frequently asked questions