No-Fault Auto Insurance Reform

Coming Soon!  Michigan’s No-Fault Auto Insurance Reform 2020

State lawmakers have made changes to Michigan's Auto Insurance No-fault law.  These changes go into effect July 2, 2020.  Of the various changes, some of the most prominent include:

Options on coverage limits for Personal Injury Protection (PIP).  This coverage was previously mandated at "unlimited" with no options. 

Personal Injury Protection (PIP) coverage will still be paid out on an Excess or Primary basis.  This means if you have other insurance that will pay for auto-related injuries, such as qualifying health insurance, you could qualify for “Excess” PIP which usually means a reduced premium.  You will have to provide your insurance carrier with written confirmation from your qualified health insurance provider.  Your auto insurance carrier might also require you to sign a form.

The minimum bodily injury (BI) liability coverage limit has been raised from $20,000 per person/$40,000 per accident to $50,000 per person/$100,000 per accident.

The state will require you to indicate your choice of coverage limits for both PIP and BI by signing a form prior to your auto policy renewal effective date.  If you do not sign the forms, your limits will default to “unlimited” for PIP and $250,000/$500,000 for BI at your policy renewal after July 2, 2020.

Persons who reside out of state that use your vehicle will no longer be covered under Michigan No-Fault law in the event of an accident. 

Defining “household” becomes very important under the new law.  Eligibility has changed.  No longer does having the same address on a driver’s license confirm your household status.  It is important you let your agent know if you have an adult child who is using a vehicle titled in your name yet he/she is not living at your residence. 

You should also alert your agent if someone lives with you who is neither your spouse or relative (noneligible household member) yet is driving a vehicle titled to you.  It is the responsibility of a noneligible household member to carry his/her own insurance.  There are policies available for individuals who do not own a vehicle yet drive someone else's.  In this situation, the driver will no longer be able to completely rely on the vehicle owner's policy in the event of an accident.

Everyone will have choices available for PIP limits; however, if you have Medicare, you have some additional choices:   

Not only does the new law allow Medicare enrollees to purchase lower than “unlimited” levels of PIP medical coverage, but if a Medicare enrollee is injured in an accident and exhausts his or her chosen PIP medical limits, and has no other available coverage, Medicare will pay for Medicare-covered services.  However, the enrollee will remain responsible for coinsurances, copayments, and deductibles, and for any services Medicare doesn’t cover.

Medicare will pay for Medicare-covered services to enrollees who opt out of PIP medical benefits, are injured in an automobile accident, and have no other available coverage. However, the enrollee will remain financially responsible for coinsurances, copayments, deductibles, and for any services Medicare does not cover, such as transportation to and from medical appointments, vehicle modifications, case management services, residential treatment programs, long-term and custodial care, and replacement services.

For more information, visit https://www.medicare.gov/Pubs/pdf/02179-Medicare-Coordination-benefits-payer.pdf  to view “Your Guide to Who Pays First.”

Michigan’s No-fault law has needed revamping for some time and these recent changes giving consumers more choices could be the start of a better no-fault system.  You can find more information at www.michigan.gov/autoinsurance

This new reform requires consumers to be better-educated when choosing coverage limits to best fit the needs of you and your family.  As your independent agent, we will help with the information you need to make the best decisions for your family.