What You Should Know About Michigan’s No-Fault Auto Insurance Reform

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What You Should Know About Michigan’s No-Fault Auto Insurance ReformIf you reside in Michigan, it’s wise to review the state’s newest laws regarding auto insurance. As of July 1, 2020, motorists across the Wolverine State are no longer obligated to purchase unlimited catastrophic no-fault coverage.

Instead, residents with motor vehicles may choose their preferred level of personal injury protection (PIP) based on their circumstances and eligibility. This coverage reimburses policyholders for reasonable and necessary medical expenses—including long-term rehabilitation, barrier-free home accommodations, and vehicle modifications—over the course of their lifetime or up to the policy’s limits, regardless of fault.

Should you sustain catastrophic injuries, you will want such protection. No other commercially available insurance—or government benefits program—offers this kind of comprehensive coverage.

To keep premiums more affordable, however, you can reduce your policy’s total limits under the new law, assuming you meet certain requirements. In addition to unlimited coverage per person, the available tiers of PIP insurance per accident now include:

  • Up to $500,000 per person;
  • Up to $250,000 per person;
  • Up to $250,000 per person excluding drivers in the household who have qualified health insurance;
  • Up to $50,000 per person for those who are enrolled in Medicaid; and
  • No PIP coverage for those who have Medicare Parts A and B.

Will the New Law Stop Catastrophic Coverage for Old Injuries?

If you’re being treated for existing injuries under an old unlimited PIP policy, your lifetime coverage will remain intact, even if you change the terms of your policy. The services you receive from healthcare providers, however, may be subject to a fee schedule as of July 1, 2021.

Have My Liability Insurance Requirements Changed?

In addition to purchasing PIP coverage, motorists in Michigan are required to carry residual body injury (RBI) and property damage (PD) liability insurance. Whereas PIP coverage will reimburse you regardless of fault, RBI/PD coverage will reimburse others if you end up causing a wreck.

Before the auto insurance reform went into effect, motorists were required to purchase at least $20,000 in RBI coverage per person, $40,000 in RBI coverage per accident, and $10,000 in PD coverage per accident. After July 1, 2020, the minimum mandatory amounts are $50,000 in RBI coverage per person, $100,000 in RBI coverage per accident, and $10,000 in PD coverage per accident.

If you hurt someone who opted to purchase anything less than unlimited PIP coverage, you could be responsible for covering the difference between his or her total available coverage and the medical expenses he or she incurs. As such, it’s advisable to purchase more than the mandatory minimum coverage amounts in RBI/PD insurance.

Speak with a Car Accident Attorney in Detroit

If you were hurt in a wreck through no fault of your own, it may be possible to recover compensation from the liable parties. To determine the best way to proceed given the circumstances, contact Seva Law Firm.

We have secured more than $100 million in settlements and verdicts for injured parties and their loved ones. Call (248) 385-5704 or fill out our Contact Form to schedule a free consultation with a car accident lawyer in Detroit.