Auto Insurance Reform

Yes, per the State of Michigan, the forms must be completed at every renewal.

It depends on the coverage you choose. All Michiganders saw savings from the MCAA reduction of $224 per vehicle to $100 per vehicle, but the total savings depend on many things. Insurance companies’ rates, the PIP limit and limit of liability that you select, and each individual’s unique situation all play a part in the savings.

While savings are important to everyone, our main goal is to make sure you and your family are properly covered in the event of a loss.

Personal injury protection, also known as PIP, is medical and rehabilitation benefits if you’re in an auto accident and you are injured, whether temporarily or permanently. As of July 2, 2020, you will now choose your coverage amount, ranging from unlimited coverage (the current Michigan law) to lower levels, or even waiving PIP coverage altogether if you qualify. You’ll see PIP as a line of coverage on your insurance declaration page.

It’s also important to point out that PIP medical covers additional expenses that your health insurance does not such as: rehabilitation, attendant care or new home/vehicle modifications.

Keep in mind that, unlike auto insurance, health insurance stops paying when the policy ends or is cancelled.

• Option 1 – Unlimited
• Option 2 – $500,000
• Option 3 – $250,000
• Option 4 – $250,000 excluding all or some person(s) from PIP Medical
  • For an applicant or name insured to be excluded they must have qualified health coverage that is not Medicare
  • Applicant/Named Insured’s spouse and any relative of either who resides in the same household must have Qualified Health Coverage (this can include Medicare).
• Option 5 – $50,000 (Medicaid option)
  • Applicant/Named Insured: Must be enrolled in Medicaid.
  • Applicant/Named Insured’s spouse and any resident relative: Must be enrolled in Medicaid, have Qualified Health Coverage, or be covered under another auto policy with PIP Medical coverage.
• Option 6 – Medicare Opt Out
  • Applicant/Named Insured: Must be enrolled in Medicare Parts A & B
  • Applicant/Named Insured’s spouse and any resident relative: Must have Qualified Health Coverage (which includes Medicare), or be covered under another auto policy with PIP Medical coverage.

With selecting a PIP option, you will be required to sign a form which explains the risks and benefits of each option. This form must be completed for each renewal (every year or 6-months depending on your policy term).

• Bodily injury (BI) is coverage if you are sued because a person covered by your auto policy becomes legally responsible for damages related to the bodily injury of others in an auto accident. This could include drivers, passengers, and pedestrians.

  Effective July 2, 2020:

  • The state minimum BI limit is increased from $20,000 per person/$40,000 per accident to $50,000 per person/$100,000 per accident
  • There is a new default liability limit of $250,000 per person/$500,000 per accident (If a policyholder does not sign the bodily injury election form the auto policy will renew with this limit.)

• • When an auto accident occurs there is a set order to determine which policy has to respond to pay for those who have been injured in the accident. The insurance company goes through this order to find a policy that has Personal Injury Protection (PIP) coverage. The new law has changed the order for which policies take priority and are responsible to pay for claims.

Old Order of Priority:

• • 1. Your Policy
    2. Your Spouse’s or Resident Relative’s Policy
    3. Owner of the accident-involved Vehicle’s Policy
    4. Operator of the accident-involved Vehicle’s Policy
    5. Insured person applies for benefits through the Michigan Assigned Claims Plan (MACP)

New Order of Priority:

• 1. Your Policy
  2. Your Spouse’s or Resident Relative’s Policy
  3. Insured person applies for benefits through the Michigan Assigned Claims Plan (MACP) – $250,000 limit (effective 7-2-20)

The new law has removed the owner and operator of the accident-involved vehicle from the order of priority. So even if the owner or operator of the vehicle involved in the accident has an insurance policy, it will not pay out for your PIP medical claim.

If the claim needs to be submitted to the Michigan Assigned Claims Plan (MACP) for consideration the max benefit is now $250,000, where previously the amount of medical coverage was unlimited.

*How could this affect you?

This means coverages no longer extends to a named insureds non-relatives who live in the same household or to relatives who do not reside in the household even if they are listed as drivers.

An example would be a child/adult who is using a vehicle titled to you but has established residency elsewhere. This could be a college student that has established residency different than yours or a young adult who just moved out due to taking a new job. Another example would be living with someone who is not your spouse or relative who does not have their own insurance but drives a car titled in your name. If any of these situations or something similar apply to you please give our office a call.

We are here to help you make a decision that makes the most sense for you and your family. Prior to calling or coming into our office, you need to know your health insurance provider (Medicare, Medicaid, or Private health insurance), and if you have private health insurance, if it is considered Qualified Health Coverage.

Qualified Health Coverage (QHC) is a health plan that will pay (without limiting or excluding coverage) for injuries related to motor vehicle accidents and has an annual individual deductible of $6,000 or less. If you have coverage under both Medicare parts A and B that is also considered QHC.

We are working through this change together. As we continue to receive information, we will update this page. Please feel free to call or email us with any additional questions you may have.

Insuranceinfo@iott.com

Blissfield: (517) 486-4381
Lambertville: (734) 854-4688
Petersburg: (734) 279-2111

For additional information on the Michigan No-Fault Auto Insurance Reform, you may access the Department of Insurance and Financial Services (DIFS) website at www.michigan.gov/autoinsurance.