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What Are My Options for PIP Coverage Under the New Michigan No-Fault Law?


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On July 1, 2020, Michigan’s new no-fault auto insurance reform law is going into effect, granting motorists new coverage options. Our Detroit car accident attorneys explain what you need to know about choosing PIP coverage under the new law.

What Is the New Michigan No-Fault Law?

No-fault insurance is designed to protect motorists in the event of a car wreck, regardless of who is liable for an accident. It also limits the number of lawsuits eligible to be filed after a car accident, except in cases of very severe injury, such as catastrophic injury or wrongful death.

As we explained in a previous blog post, Governor Gretchen Whitmer signed Senate Bill 1, referred to as the “No-Fault New Law,“ into law last year. The new law eases Personal Injury Protection (PIP) requirements, a major component of no-fault insurance, by allowing drivers to opt out of full coverage insurance. The intention was to grant drivers lower-cost insurance by offering up to 45% in savings.

Coverage Options Under the New Law

For all insurance policies issued or renewed after July 1, 2020, motorists in Michigan will now have to choose one of the following levels of protection for No-Fault medical benefits:

$50,000 Medicaid Option – MCL 500.3107c(1)(a)

Available to those who satisfy two (2) conditions:

  • The person is covered under Medicaid; and

  • The person’s spouse and all resident relatives are on Medicaid, have other health insurance, or have PIP coverage through a different policy.

$250,000 Option - MCL 500.3107c(1)(b)

  • Available to any person without limitation

$500,000 – MCL 500.3107c(1)(c)

  • Available to any person without limitation

Unlimited Lifetime Option – MCL 500.3107c(1)(d)

  • Available to any person without limitation

Complete Opt Out – MCL 500.3107d

Available to those who satisfy two (2) conditions:

  • The person is a qualified person; and

  • If the person, spouse, and any relative of either that resides in the same household have qualified health coverage or have other coverage under MCL 500.3107(1)(a).

Which Coverage is Right for You?

The new law will tempt many motorists into choosing a lower policy amount to try to save money. However, the unfortunate reality is that if you select anything less than unlimited coverage, you are risking not having enough to pay for your injuries if you are seriously hurt in a car accident.

At Goodman Acker, we recommend that all drivers elect the unlimited lifetime option. The savings you will see by giving up this benefit will only save you a few dollars, but in the end, the loss to you and your family could be catastrophic.

Under the lifetime option, you are entitled to unlimited medical coverage. Giving up that lifetime benefit for a lower cost option is incredibly risky. The $50,000 option will barely pay for one day’s care for a severely injured victim of a motor vehicle accident. The $250,000 option will barely pay for one week’s care.

Under Michigan’s no-fault law, all drivers, regardless of their race, religion, or sexual orientation, have long had lifetime benefits when injured in an auto accident. Giving up those rights is nothing but a political attempt to deny poorer communities their medical rights. Most have no benefit from the new law seen in their new rates from the insurance companies; in fact, many have seen their rates continue to climb.

Stay protected. Stay with the unlimited coverage. Remember the savings you will see on your auto insurance bill will only be on the PIP portion of your bill—roughly 35% of your total bill. You may be able to receive a small amount of savings, but the tradeoff of unlimited benefits could be catastrophic.

Do you have more questions about car insurance coverage under Michigan’s new no-fault law? Read more by visiting our Michigan’s New No-Fault Law Explained page or contact our Detroit car accident lawyers for more information.