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There are big changes coming to Michigan's No-Fault Auto Insurance Law in 2020

Pioneer State Mutual (Editor)

We hope this summary helps you understand the big picture and how you may be impacted.If you have questions about anything related to your auto insurance, be sure to reach out to your Independent Agent. They are your best resource for help with understanding your coverage's and options.

BIG CHANGE #1 Bodily Injury Liability

First, what is Bodily Injury Liability? This is coverage for if you get 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.

What changed? The new law has increased the amount required for Bodily Injury Liability limits that must be carried on an auto policy. Previously, the lowest limit you could purchase was $20,000/$40,000 (where $20,000 is the limit for any one person in a single accident, and $40,000 is the limit for a single accident where more than 1 person is injured). Beginning on July 2, 2020, the new law requires limits of $250,000/$500,000 or higher unless you sign a form stating that you understand the risks of having lower limits. By signing this form, you may select Bodily Injury limits as low as $50,000/$100,000.

BIG CHANGE #2 Personal Injury Protection (PIP) Choice

What is Personal Injury Protection (PIP)? If you or a resident relative are injured in an auto accident, your insurance policy covers you, your spouse and any resident relatives (regardless of fault) based on your PIP coverage. A resident relative is defined as a person related to you by blood, marriage or adoption who lives in your household including a ward or foster child that is duly appointed or established by a court of law.

Your PIP coverage is broken up into three categories: Medical Expenses, Work Loss, and Replacement Services.

Medical Expenses (PIP Medical): Your policy will pay up to your policy limits for claims covering medical expenses for the insured’s care, recovery, or rehabilitation. Charges incurred for any products, services, and accommodations must be reasonable and necessary. Reasonable funeral and burial expenses are also covered up to your policy limits.

Work Loss: Your policy will pay for your loss of income due to an auto accident up to 85% of your current salary for a maximum of three years (your policy sets a maximum per month limit as well).

Replacement Services: If an auto accident causes an inability to complete certain tasks such as lawn/garden maintenance, housekeeping, child care and more, your policy will pay up to $20 per day for up to three years.

What changed? Before the law changed, all Michigan auto policies were required to carry Unlimited PIP Medical coverage. There were no options for different limits like with Bodily Injury. Beginning July 2, 2020, you will have the following options for your PIP Medical limit: 

  • Option 1 - Unlimited (this is still an available option but at a reduced price)

  • Option 2 - $500,000

  • Option 3 - $250,000

  • Option 4* - $250,000 excluding all or some person(s) from PIP Medical

  • Option 5* - $50,000 (Medicaid option)

  • Option 6* - Medicare Opt Out 

Selecting your PIP option involves signing a form which explains the risks and benefits of each option. This form must be completed before a policy is issued and for each renewal (every year or 6-months depending on your policy term).

*Options 4, 5 and 6 have the following additional requirements in order for you to qualify to select them:

Option 4 - $250,000 excluding all or some person(s) from PIP Medical Applicant/Named Insured: To be excluded, they must have health coverage that does not exclude or limit coverage for injuries related to motor