Michigan’s New Auto Insurance Law
You may have heard that, after more than 45 years, the Michigan No-Fault Law is undergoing significant changes. If you have been relying strictly on what you read in the papers or online, you may be in for a big surprise. In a nutshell, it’s not good. Michigan drivers and their families are going to lose extremely valuable coverage we have had since 1973 while getting almost no financial benefit.
If you are involved in an accident involving a motor vehicle, contact us to assist you in going through this complicated process.
You’re Not Going To Save Much Money On Your Premium
The new law does provide for some reductions of your insurance premium, but only on one part of your premium. If you hear you’re going to save 20% or 30% of your premium, you can’t look at 20% or 30% of what you paid last year and assume that’s what you are going to save. The savings are only on one part of the premium, your personal injury protection (PIP). In addition, the new law calls for increasing the minimum amount of liability coverage you have from $20,000 to $250,000. The premium increase to cover this increase in this part of your coverage will offset some of the limited savings you are getting on the PIP portion.
In summary, expect only a minimal reduction in your premiums at best.
Michigan’s no-fault system offered lifetime health care for accident victims. Now, drivers will have a variety of choices, calling for limited medical coverage. Again, this is going to leave many accident victims seriously underinsured. Injury victims are going to lose access to needed medical care, including rehabilitation, therapy and medication. Many accident victims will be forced to declare bankruptcy or end up on Medicaid.
Non-occupant Auto Accident Victims
The new law will affect motorcyclists, bicyclists and pedestrians. All will lose their lifetime medical coverage and this is a class of accident victims that typically suffer very serious injuries.
The new law puts into effect a fee schedule. We will see medical facilities, including hospitals, being reimbursed far less than they have in the past. This may well force many medical care providers to simply close their doors.
The new law is very complicated. Parts of it have already taken effect and other parts take effect in July, 2020 and July, 2021. Here is the bottom line.
Do not opt for lower PIP limits. If you are involved in a serious accident, that decision could easily bankrupt you.
Increase your uninsured motorist and underinsured motorist coverage (typically a very inexpensive part of a policy) as much as you can afford. If you injure someone else and they have chosen low PIP coverage, they can sue you now for their economic losses like their medical expenses which was never allowed under the current law.
The law is subject to changes. Some of it is very poorly written. There is a move to amend parts of the new law, but nobody knows whether or not this will be successful or occur at all.
If you are involved in a motor vehicle accident, call us. We will help guide you through these changes.