MI Auto Insurance Reform
“THINGS YOU NEED TO KNOW”
In June Michigan Legislature passed laws that changed the Michigan Auto Insurance System. The new law went into effect on July 2nd 2020. Consumers will have options on the amount of Personal Injury Protection (also known as PIP). No longer will everyone in Michigan automatically have Unlimited coverage for their medical bills.
Consumers will now have to choose between six different options depending on their individual situations and eligibility for each option. Prior to your renewal being issued you should call us and our experienced team will go over your policy to make sure that you are fully insured to protect you and your family.
PIP (Personal Injury Protection) OPTIONS
Option 1: Unlimited
This option provides the most coverage. It will pay for all allowable expenses for your care, recovery, and rehabilitation cost if you are injured in an auto accident.
ELIGIBILTY: There are none. Everyone is eligible for this coverage.
DISADVANTAGES: The cost for this option will be higher than the other options, although the cost will be similar or slightly less than what you are currently paying.
ADVANTAGES: PIP (Personal Injury Protection) medical cover costs that may not be covered by your health insurance (example: rehabilitation costs, attendant care). With this choice you minimize your out-of-pocket expenses for your care.
Option 2: Limited Coverage of 500,000
Option 3: Limited Coverage of 250,000
ELIGIBILTY: There are NO eligibility requirements.
ADVANTAGES: Lower coverage limits have slightly less expensive costs than plans with higher or unlimited PIP medical coverage. Depending on which limit you choose PIP medical will cover the cost of services you need that may not be covered by health insurance (example: rehabilitation, attendant care).
DISADVANTAGES: Limited PIP medical coverages may not be enough to cover your medical expenses in the event of a auto accident. If your PIP medical limit is reached, you may need to rely on other health coverage, which may not cover all medical, rehabilitation and attendant care. If you do not have other health coverage you may be personally responsible for paying these expenses.
Option 4: 250,000 PIP EXCLUSION
This option is only available for those who choose the 250,000 PIP medical limit. For individuals that qualify and choose this option, and are injured in an auto accident will have to rely on their QHC provider. What is QHC (Qualified Health Coverage)? Its health or accident insurance coverage for injuries related to auto accidents and has a deductible of $6,000 or less per person.
ELIGIBILTY: Insureds who have a QHC, or spouse or resident relatives in the same household who have a QHC or enrolled in Medicare parts A and B. If not all household residents are eligible, it is still possible to elect this option, with the exclusion applying only to eligible individuals.
ADVANTAGES: You will pay a reduced premium because you will not be charged a premium for PIP (Personal Injury Protection) medical coverage for anyone who is excluded.
DISADVANTAGES: ANYONE YOU EXCLUDE WILL NOT HAVE PIP MEDICAL COVERAGE.
Option 5: Limited coverage of $50,000 (Medicaid Option)
This option if chosen has a limit of $50,000 which would be the most your auto insurance company will pay per person per accident for an injured person’s expenses under PIP medical coverages.
ELIGIBILTY: Insureds who are enrolled in Medicaid. However, a spouse and/or resident relative(s) in the same household must also be enrolled in Medicaid, be enrolled in Medicare parts A and B, have other PIP Allowable Expense coverage, or a QHC.
ADVANTAGES: Lower coverage limits have lower costs than plans with higher or unlimited PIP medical coverage. Up to the limit chosen, PIP medical will cover the cost of products and services that may not be covered by health insurance, such as rehabilitation and attendant care.
Option 6: Allowable Expense Opt-Out Coverage (Medicare Only)
This option is complete opt-out of Allowable Expense coverage for Medicare recipients.
ELIGIBILTY: Insureds who are enrolled in Medicare Parts A and B. However, a spouse and any resident relative(s) in the same household must also be enrolled in Medicare Parts A and B, have other PIP Allowable Expense coverage, or a QHC.
ADVANTAGES: You will pay a reduced premium because your policy will not be charged a premium for PIP medical coverage.
DISADVANTAGES: NO PIP MEDICAL COVERAGE WILL BE PROVIDED UNDER YOUR POLICY. You and any other persons covered by this policy will not have PIP medical coverage. You and household relatives will have to rely on other health coverage to pay for medical expenses resulting from an auto accident. Insured’s who rely on Qualified Health Coverage to pay for auto accident injuries should be aware that unlike auto insurance, health insurance stops paying when the policy ends or is canceled. IMPORTANT! If anyone covered by this policy loses qualified health coverages MUST notify your insurance company within 30 days of loss of coverage. A person who has not obtained a qualified health plan or PIP medical coverage within 30 days of the loss of coverage will NOT be entitled to any PIP medical benefits.