The 3 BASICS of No-Fault Auto Insurance Reform

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1. Personal Injury Protection “PIP Medical” Options

STAY SAME – SAVE 10% or More on PIP Medical

  • Unlimited: Same Coverage as before with at least 10% PIP premium reduction.  Highest coverage provided of any state in the country.

LIMIT COVERAGE – SAVE 20%, 35% or 45% on PIP Medical

  • Limited Coverage of $500,000: Studies show 99% of PIP Medical claims fall under $500,000
  • Limited Coverage of $250,000: Studies show 98% of PIP Medical claims fall under $250,000
  • Medicaid option of $50,000: For low income individuals enrolled in Medicaid.  The Named Insured is enrolled in Medicaid AND any Spouse AND all resident relatives have one of the following: 
    • qualified health coverage;
    • Medicaid enrollment, or
    • coverage under another auto policy with PIP medical coverage.

 EXCLUDE COVERAGE (FOR SOME OR ALL) - $0 on PIP Medical

  • Limited Coverage of $250,000 some or all excluded. Requires Named Insured who is excluding coverage has “qualified health coverage” that is not Medicare.  Any “resident relative” or spouse who is excluding PIP medical has “qualified health coverage.”
  • Medicare option (65 years old) No PIP Medical coverage for anyone covered by the policy:

                      Named Insured has coverage under both Medicare Parts A and B, AND

                      Any Spouse and all “resident relatives” covered by the policy have qualified health coverage or are covered under another auto policy with PIP medical coverage.

Reference: State of Michigan’s SELECTION OF PERSONAL INJURY PROTECTION (PIP) MEDICAL COVERAGE form.  For the full pdf form including definitions, click the following: Michigan Selection PIP Medical Form  

2. New Default Bodily Injury Liability Limit

From State of Michigan “CHOICE OF BODILY INJURY LIABILITY COVERAGE LIMITS” Form

BODILY INJURY LIABILITY INSURANCE COVERAGE EXPLAINED

Bodily injury liability insurance covers claims made against you for injuries to others if you are at fault in an auto accident. Michigan auto insurance policies are required to provide bodily injury liability insurance coverage of not less than $250,000 per person and up to $500,000 per accident (“$250,000/$500,000”) for these claims unless you select higher or lower limits depending on the amount of protection you need. In no event can you select less than $50,000 per person and $100,000 per accident. If you do not make a selection, your policy will be issued with limits of $250,000/$500,000.

If you want bodily injury liability coverage limits of $250,000/$500,000 or more, you do NOT need to complete the form.

PART B: INCREASED RISKS WITH LOWER BODILY INJURY LIABILITY INSURANCE COVERAGE LIMITS

If you are responsible for injuries to another person, you may be liable for damages for their pain and suffering, as well as the costs of their medical and other care that exceed their coverage under their auto insurance policy. The bodily injury liability limit of your policy will pay for such damages, but only up to the amount of the limit you choose. You will be required to pay any amount over the limit you choose. This amount could be substantial and may lead to severe financial consequences, such as:

  • Your assets may be seized, or a lien may be placed on your home;
  • Your wages may be garnished; or
  • Your driver’s license may be suspended.

Reference: State of Michigan’s Reference: State of Michigan’s CHOICE OF BODILY INJURY LIABILITY COVERAGE form. For the full pdf form including definitions, click the following:  Michigan BI Selection Form

3. Increased Need for Personal Umbrella Liability

Many drivers will be selecting lower limits or opting out of Personal Injury Protection.  Due to this, motor Vehicle owners and operators will be liable for more damages than they were before. 

A Personal Umbrella Liability is recommended by most Financial Advisors and provides coverage above your base liability limits for your Automobile, Home and other eligible personal liability exposures.  The coverage limits begin with an additional $1,000,000 of coverage and premium is typically $200 annually.