Michigan Auto Insurance: No-Limit End Date Explained

Michigan's auto insurance law underwent significant changes in 2020, with the state's governor signing a bipartisan bill to lower costs for drivers while maintaining high coverage options. One of the most notable changes was the elimination of the mandate for unlimited personal injury protection (PIP) on auto insurance policies, which came into effect on July 2, 2020. This reform gave drivers the option to choose from different PIP coverage limits, including $50,000, $250,000, $500,000, and no-limit options. These changes provided Michigan drivers with significant savings, with premiums reduced by up to 100% in some cases. The new law also introduced consumer protections, such as prohibiting insurance companies from using non-driving factors like credit scores and zip codes to set rates.

No-fault insurance laws

Michigan is one of 12 no-fault states in the US. Under no-fault insurance laws, drivers who are hurt in a car accident make a claim with their own car insurance company, regardless of who caused the accident. This helps drivers recover their economic losses with as little downtime as possible and limits court proceedings.

Michigan's no-fault insurance laws were changed in 2020, with the mandatory comprehensive lifetime no-fault personal injury protection (PIP) insurance coverage replaced by a tiered system. This allows individuals to opt out or purchase as little as $50,000 of PIP coverage for medical expenses under certain circumstances. Other options include $250,000, $500,000, and no-limit.

The new law also allows drivers to choose from six PIP coverage limits, with some options carrying stipulations. These include:

• Unlimited coverage per person per accident
• Up to $500,000 in coverage per person per accident
• Up to $250,000 in coverage per person per accident
• Up to $50,000 in coverage per person per accident (only available for Medicaid recipients)
• Opt-out with no PIP coverage (only available for those with qualifying health care plans)

In addition to the changes to PIP coverage, the new Michigan no-fault insurance law also includes a reduction in the number of hours of family-provided in-home care that insurance companies are required to pay for, from 24 hours to 56 hours per week. The law also includes a limit on the amount that hospitals, doctors, and other healthcare providers can charge insurers for medical care covered by no-fault auto insurance.

Personal injury protection (PIP)

Michigan's auto insurance law underwent significant changes, which came into effect on July 1, 2020, and brought an end to the mandate for unlimited personal injury protection (PIP). This reform gave Michigan drivers more options and greater savings.

Under the new law, Michigan drivers have the option to choose from different PIP coverage limits:

• Unlimited coverage per person per accident: This option provides lifetime reimbursement for reasonable and necessary medical expenses related to the accident.
• Up to $500,000 in coverage per person per accident: Available to all drivers.
• Up to $250,000 in coverage per person per accident: Available to all drivers, with the option to exclude coverage for certain individuals if they have qualifying health insurance.
• Up to $50,000 in coverage per person per accident: Available only to Medicaid enrollees who meet additional eligibility requirements.
• Opt-out with no PIP coverage: Available only to drivers with Medicare Parts A and B who meet specific eligibility criteria.

The choice of PIP coverage limit is a critical decision for Michigan motorists, as it directly impacts the level of financial protection they will have in the event of an accident. While the higher coverage limits provide more comprehensive protection, the lower limits can result in significant savings on insurance premiums.

It is important to note that PIP also includes other benefits, such as wage loss coverage, replacement services, and funeral and burial expenses, even if an individual chooses to opt out of the medical portion of PIP or selects a lower coverage limit. Additionally, individuals who opt out of PIP medical coverage or choose a lower limit should be aware of the potential financial implications if their medical costs exceed the coverage amount.

The new auto insurance law in Michigan provides drivers with greater flexibility and the opportunity to save money on their insurance premiums. However, it is essential to carefully consider the different coverage options and their potential consequences before making a decision.

Property protection insurance (PPI)

On July 2, 2020, Michigan eliminated the mandate for unlimited personal injury protection (PIP) on auto insurance policies. This reform, along with others, resulted in savings of over $1,000 on average for Michigan drivers.

PPI covers the costs to repair any collateral property damage you cause in an accident up to a total of $1 million per crash. This typically covers stationary objects such as a light pole or building and usually doesn't cover another driver's car unless it is parked.

PPI coverage always has a $1 million policy limit. It is paid without regard to fault in an auto accident. For example, if you are waiting to make a left turn and another vehicle strikes you and pushes you into a telephone pole, both your insurance company and the insurance company of the wrongdoer will share equally in the cost to repair or replace the telephone pole.

The statute of limitations on a PPI claim in Michigan is one year. If your parked car or any other property is damaged by another driver, the actual responsible party is the insurer of the vehicle's owner. If a claim cannot be made against the owner's insurer, then the claim can be filed against the insurer of the person driving the vehicle at the time the property damage occurred.

Residual bodily injury liability (BI)

The minimum coverage limits for residual BI insurance in Michigan are $250,000 per person and $500,000 per accident. These limits were increased from $20,000 per person and $40,000 per accident, effective July 2, 2020. However, drivers in Michigan have the option to choose lower coverage limits of $50,000 per person and $100,000 per accident by signing a specific form approved by the Michigan Insurance Commissioner. This form must disclose the risks of choosing lower coverage limits, and the driver must acknowledge their understanding of these risks.

While the minimum coverage limits for residual BI insurance in Michigan are set by the state, insurance experts recommend that drivers consider purchasing higher coverage limits to protect their assets in the event of a severe accident. The recommended coverage limits for Michigan drivers are $500,000 per person and $1,000,000 per accident.

Residual BI insurance in Michigan is designed to cover the policyholder's liability for injuries or death caused to another person in a car accident. It is important to note that this type of insurance does not cover the policyholder's own injuries or associated costs. Instead, it focuses on the expenses and losses incurred by the other person involved in the accident, also known as the "third party".

The types of expenses and losses covered by residual BI insurance in Michigan include:

• Medical bills: Hospitalization, follow-up care, and related medical or healthcare expenses incurred by the injured person.
• Lost wages: Income lost by the injured person due to their inability to work as a result of the accident.
• Legal fees: The policyholder's legal defence fees if they are sued by the injured person.
• Funeral costs: Expenses associated with funeral and burial if the accident results in a fatality.

It is important to understand the limits of residual BI insurance coverage. In Michigan, the coverage limits are typically stated in a three-number format, such as "$250,000/$500,000". The first number represents the maximum amount covered per person, while the second number represents the total maximum amount covered per accident. Therefore, if two people are injured in an accident and both incur medical expenses of $250,000 each, the insurance policy will only cover up to the per-accident limit, leaving the policyholder responsible for the excess amount.

In conclusion, residual bodily injury liability (BI) insurance in Michigan is a crucial form of coverage for drivers, offering protection in the event of causing injuries or death to another person in a car accident. While the state sets minimum coverage limits, it is advisable to consider higher limits to adequately protect personal and family assets. Understanding the coverage limits and exclusions of residual BI insurance is essential for Michigan drivers to make informed decisions and ensure adequate financial protection.

Residual property damage liability (PD)

Michigan's auto insurance law underwent significant changes in 2020, which resulted in notable savings for Michigan drivers. The state eliminated the requirement for unlimited personal injury protection (PIP) on auto insurance policies.

In Michigan, the minimum residual PD coverage required is $10,000 per accident. This means that if you cause an accident and the damage to another person's property exceeds $10,000, you may have to pay for the remaining costs out of pocket.

Michigan's auto insurance law refers to residual PD coverage as having a "per accident" limit and no deductible. This means that the coverage pays out after an accident, but only up to the amount stated in your policy. If you cause another accident, the coverage will again pay out up to that policy limit.

It is worth noting that Michigan is a ""no-fault" state, which means that your insurance company will cover the reasonable and necessary medical expenses for you and your passengers in an accident, regardless of who is at fault. However, in extreme cases, such as causing death or permanent disability, your residual PD coverage may come into play to cover the other party's property damage.

While the minimum coverage may be sufficient for some drivers, purchasing higher limits or additional coverage can provide extra protection and peace of mind.

Frequently asked questions