As a Michigan driver, you’ve been registering and operating your vehicles under a no-fault auto insurance system since the 1970s. This system requires that Michigan drivers secure auto insurance policies that cover medical expenses, replacements, and damage associated with car accidents without regard for who caused the accident.

In an effort to lower some of the highest insurance rates in the country, Michigan car insurance changes were announced in May 2019 and recently implemented on July 1, 2020. From lower annual premiums to more medical coverage options, Michigan car insurance changes may affect your family’s insurance policies in different ways.

While these changes have caused confusion for many, Doeren Mayhew Insurance Group specializes in guiding our clients and recommending the best coverage options that suit their unique coverage needs. We deliver peace of mind that you’re financially protected in the event of an accident. We can help you navigate the complexities of the new Michigan laws in re-evaluating your insurance options.

Michigan’s Mandatory No-Fault Automobile Insurance

Historically, there have been three parts to the mandatory no-fault automobile insurance coverage required of car owners: Personal Injury Protection (PIP); Property Protection Insurance (PPI); and Bodily Injury and Property Damage (BI/PD).

In Michigan, PIP ensures that medical expenses associated with auto accidents are covered for life with unlimited coverage. PPI Insurance pays up to $1 million for property damage, including to parked cars, caused by your vehicle while in the state of Michigan. Finally, BI/PD provides coverage to drivers from being sued if they caused bodily injury or property damage while operating their vehicle.

Changes in the Michigan Car Insurance Reform

The new auto insurance law reform allows Michigan drivers the option to elect a different level of PIP medical coverage on their policies. In effect, insured drivers must indicate whether car or medical insurance provides primary coverage in the event of an auto accident. Once the primary coverage limit has been exhausted — which may cover expenses for medical care, recovery, rehabilitation, or funerals — the secondary form of coverage will take over.

It’s important to note that many medical insurance policies — notably, policies secured through an employer — mandate that they cannot be treated as a primary insurance provider. Furthermore, if an insured individual sustains injuries that causes a long-term disability or otherwise prevents them from working, the employer’s insurance policy may not cover the related medical bills after the employee is terminated. That’s why it’s essential to secure or maintain PIP coverage in order to ensure medical claims related to car accidents are covered.

Other changes that come with the new Michigan car insurance law include, but are limited to, the following:

  • Residual Bodily Injury (BI) Coverage: Insured drivers are protected against claims made by injured persons due to an increase of the minimum BI coverage limit.
  • Mini-Tort: More money can lawfully be recovered in small claims court for uninsured damages.
  • Non-Driving Factors: Auto insurance rates can no longer be set per a driver’s marital status, credit score, or educational level, among other non-driving factors.
  • Fines and Penalties: Law violations on the part of insurance companies and agencies are punishable by fines and penalties.
  • Source of Coverage: If a non-family member (i.e., friend, household employee, etc.) drives a vehicle that is involved in an accident, their insurance policy will be the source of the coverage rather than the policy of the car owner.

What You Should Do

The amount of coverage you need is informed by a number of factors. But, for many families, higher coverage levels provide adequate insurance to cover future medical costs associated with auto accident injuries. At the highest level, unlimited coverage offers the most protection, especially for those with health insurance policies with higher deductibles, or those with insurance through an employer.

However, It’s important to talk to a trusted auto insurance agent, as well as your health insurance carrier, to better understand the benefits and risks of the different coverage options given your family’s unique risk profile and lifestyle. Contact one of our trusted insurance advisors to learn more about the new Michigan car insurance changes, or request a quote online to ensure your family has proper coverage.