There is a lot of noise about the new law going into effect on July 2, 2020. Here is a survival guide on how
to navigate through the changes.
Some history: Back in 1973 Michigan passed a law that anyone in the state covered by an auto insurance policy
must be provided unlimited Personal Injury Protection benefits known as PIP. This would allow a person
injured in an auto accident to have unlimited medical benefits for the rest of their life.
The Problem: As we all know, health care rates are increasing and so are the number of lawsuits across
our state. Therefore, Michigan is ranked 4th in highest rates and simultaneously under insured drivers in the
Their solution: Give Michigan drivers a choice to pick their level of PIP Coverage.
Here’s how it works: You can still choose unlimited coverage and it will be automatically chosen for you if
you do not select another option. Or you can choose $500,000 or $250,000 both options
if you have a qualified health coverage in which all drivers are covered by health or auto accident coverage.
If you are a Medicaid enrollee you can chose $50,000 in coverage but it’s subject to conditions.
Opt out: If you are on Medicare or if you have a qualified health coverage in which all drivers are covered by health or
auto accident coverage The savings: Is based on which plan you chose. 10% PIP
reduction for unlimited, 20% for $500k, 35% for $250k and 45% for $50k if eligible. Opting out of course you save 100%
Most Importantly: Michigan’s Auto No fault Reform Law changes the order in which an injured person collects PIP
benefits and who can be covered. Drivers, passengers or pedestrians are no longer provide PIP coverage unless they
are the named insured, the named insured spouse or a family member living with them. Otherwise, Michigan residents will
be given PIP benefits through the Michigan Assigned Claims Plan (MACP) with a $250,000 limit.
But wait, there’s more: The law also increases current minimum liability from 20/40 to a whopping $250k/$500k.
Also, the mini-tort provision for damages to a motor vehicle not covered by insurance increases from $1,000 to $3,000.
Get this: If you don’t have prior or failed to maintain coverage from July 2, 2020 through January 1, 2022 you can’t
be refused or charged a reinstatement fee or your insurance premiums can’t be increased solely because you didn’t have
Notes from the editor: Now more than ever is it important for you to have umbrella insurance and make sure your family is
protected from a lawsuit.