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Michigan No-Fault Auto Insurance Reform

Michigan’s current auto insurance law provides you auto insurance that includes unlimited Personal Injury Protection (PIP) medical coverage to pay for your expenses if you are injured in an auto accident. The new auto insurance law allows Michigan drivers to choose from six levels of PIP medical coverage when a policy is issued or renewed after July 1, 2020. The following PIP coverage choices are available to all Michigan drivers: unlimited (current level), $500,000 or $250,000. Additional PIP coverage choices are available to Michigan drivers who meet certain criteria; these additional coverage choices are: limited $250,000 with PIP exclusion(s), $50,000 or PIP medical opt-out.

IMPORTANT: Most health plans do not pay any benefits for the treatment of injuries or illnesses received in or related to an auto accident. Therefore, the health plan is not considered “qualified health coverage” for purposes of no-fault reform.

What is the difference between my auto policy’s PIP medical coverage and the medical coverage provided under most health plans?

As summarized below, an auto policy’s PIP coverage covers substantially more auto accident-related items and services than a group health plan. Note: this summary assumes unlimited PIP coverage applies.

Auto Policy’s Unlimited PIP Medical Coverage

Typical Health Plan Medical Coverage

Covers all reasonable and necessary auto accident-related medical expenses

Covers most medical expenses but does not cover auto accident-related claims incurred by Michigan residents

Covers attendant care

Does not cover attendant care

Covers rehabilitation, even past the point in which further progress is no longer likely

Covers medically necessary rehabilitation but does not cover auto accident-related rehabilitation for Michigan residents

Covers lost wages for up to three years after the date of the accident

Does not cover lost wages

Covers vehicle or housing modifications

Does not cover vehicle or housing modifications

Covers some funeral expense benefits and survivor’s benefits that are paid to the dependents of a covered person if injuries from an auto accident result in their death

Does not cover funeral expenses and survivor’s benefits

Provides unlimited medical coverage for a person’s lifetime

Health plan coverage ends when the individual ceases to be eligible under the terms of the plan (e.g., cannot return to work)

What possible risks do I face if I decide to choose an auto policy option after July 1, 2020 that does not provide unlimited PIP medical coverage?

You could be responsible for paying all auto accident-related medical, rehabilitation or attendant care costs that are not covered under your auto policy. This means that once your auto policy has reached its PIP coverage limit (usually $250,000 or $500,000, depending on the policy option selected), you will likely be personally responsible for paying these expenses.

BOTTOM LINE: To protect yourself and your family from financial catastrophe in the event of an auto accident that causes serious injuries, you are urged to purchase unlimited PIP coverage on a primary/uncoordinated basis that will provide comprehensive, lifetime benefits for accident-related claims that may not be covered by your health plan.

© 2020 Varnum LLPNational Law Review, Volume X, Number 161



About this Author

Bonnie Sawusch, Personal Injury Lawyer, Varnum Law Firm

Bonnie has 25 years of experience representing people and families whose lives have been affected by catastrophic personal injury and death. She has been involved in investigating, litigating and resolving a wide variety of cases, including trucking and automobile collisions, airplane disasters, fires and explosions, burn injuries and electrocutions in multiple states.

Bonnie's legal practice is strongly influenced by her previous 15-year career as a critical care nurse in a large acute care hospital. She holds a B.S. in Nursing and continues to maintain her license to practice as a...

Peter A. Smit, Varnum, litigation lawyer

Peter is a partner and leads the Personal Injury Practice Team. His practice focuses on business litigation defense (FSLA, Product Liability Defense, Malpractice Defense) as well as significant experience in personal injury, wrongful death, auto and trucking litigation. Peter is certified in Alternative Dispute Resolution for practice in the U.S. District Court for Western District of Michigan and in Michigan circuit courts.