No-Fault Auto Insurance in Michigan: What You Need to Know

What is Michigan No-Fault Auto Insurance?

Michigan No-Fault Auto Insurance is a system designed to ensure that anyone injured in a car accident gets the help they need quickly, regardless of who caused the accident. This system is built on Personal Injury Protection (PIP), which is mandatory for all drivers in Michigan.

Key Features of Michigan No-Fault Insurance

Medical Expenses: PIP covers all “reasonable and necessary” medical expenses resulting from a car accident. This includes hospital bills, surgeries, rehabilitation, and even long-term care if needed.

Lost Wages: If your injuries prevent you from working, PIP also covers lost wages for up to three years. This ensures that you can focus on recovery without worrying about your income.

Funeral Costs: In the unfortunate event of a fatal accident, PIP provides benefits for funeral and burial expenses, helping to ease the financial burden on your loved ones.

These benefits are available regardless of fault, meaning you don’t have to prove who was responsible for the accident to receive help.

Recent Changes to Michigan No-Fault Insurance

PIP Choice: One of the significant updates to Michigan’s No-Fault law is the introduction of PIP Choice. Before, all drivers had unlimited PIP coverage. Now, you can choose from several levels of PIP coverage, including:

• Unlimited Coverage: This option provides lifetime medical benefits without any cap.
• Capped Coverage: You can choose lower limits like $500,000, $250,000, or even $50,000 (for those on Medicaid).

Opt-Out Options: Seniors on Medicare can opt out of PIP medical coverage entirely, relying solely on their Medicare benefits.

Medicare-Based Fee Schedule: To control medical costs, Michigan has implemented a fee schedule based on Medicare rates. This means that medical providers are reimbursed at rates similar to those used by Medicare, which helps reduce overall insurance costs.

These changes aim to give drivers more control over their insurance costs while ensuring they still receive necessary medical care after an accident.

How Does Michigan No-Fault Insurance Work?

Filing a Claim

When you’re involved in a car accident in Michigan, the first step is to file a claim with your own auto insurance company. This is the essence of the no-fault system: you go to your own insurer for coverage, regardless of who caused the accident.

Key Steps in the Claim Process:

1. Notify Your Insurance Company: Contact your insurer immediately after the accident. Provide details about the incident and any injuries sustained.
2. Submit an Application for Benefits: You must fill out and submit an application for no-fault benefits. This application needs to be sent to the correct insurance company within one year of the accident.
3. Document Your Expenses: Keep records of all medical bills, lost wages, and other accident-related expenses. This documentation is crucial for your claim.

Important: If you fail to submit your application within the one-year deadline, you will be barred from receiving no-fault benefits forever.

Residual Liability Coverage

While Michigan’s no-fault insurance covers your own medical bills and lost wages, it doesn’t absolve you from all liability. This is where residual liability coverage comes into play.

What Does Residual Liability Cover?

• Bodily Injury: If you are at fault in an accident, residual liability coverage pays for injuries to others. Michigan law requires minimum coverage of $250,000 per person and $500,000 per accident. However, you can choose higher limits for better protection.
• Property Damage: This covers damage to other people’s property. The state minimum is $10,000, but higher limits are advisable.

Coverage Limits: Be aware that if the damages exceed your coverage limits, you could be personally liable for the excess amount. This is why many experts recommend purchasing higher coverage limits.

Understanding how to file a claim and the role of residual liability coverage can help you steer Michigan’s no-fault insurance system more effectively. Next, we’ll dive into the mandatory and optional coverages you need to know about.

Mandatory and Optional Coverages

Personal Injury Protection (PIP)

Personal Injury Protection (PIP) is a mandatory coverage in Michigan’s no-fault auto insurance system. PIP covers medical expenses, lost wages, attendant care, and funeral expenses, regardless of who caused the accident.

Here’s what PIP includes:

• Medical Expenses: Covers reasonable and necessary medical expenses. This can include hospital bills, surgeries, and even physical therapy.
• Lost Wages: If you can’t work due to accident injuries, PIP covers up to three years of lost wages.
• Attendant Care: Provides up to $20 a day for services you can’t perform yourself, like housekeeping.
• Funeral Expenses: If the worst happens, PIP covers funeral and burial expenses.

Property Protection Insurance (PPI)

Property Protection Insurance (PPI) is another mandatory coverage. PPI covers damage your car does to other people’s property, but there are some exclusions.

Key points about PPI:

• Coverage Limits: PPI covers up to $1,000,000 in property damage.
• Exclusions: PPI does not cover damage to other vehicles unless they are properly parked. It also doesn’t cover damage to your own car or accidents outside Michigan.

Residual Liability Insurance

Residual Liability Insurance comes into play if you’re sued or found legally responsible for an accident. This is crucial for covering bodily injury and property damage.

Coverage Limits:

• Bodily Injury: Up to $50,000 for one person’s injury or death, and up to $100,000 for all persons injured or killed in one accident.
• Property Damage: Up to $10,000 for damage to other people’s property.

Higher Limits: You can opt for higher limits to better protect your assets. For example, you could choose $250,000/$500,000 for bodily injury and more than $10,000 for property damage.

Recent Michigan No-Fault Insurance Changes

PIP Choice

Before July 1, 2020, Michigan drivers had to purchase “unlimited” Personal Injury Protection (PIP) medical benefits, covering all car accident-related medical care. Now, drivers have options. They can stick with unlimited coverage or choose capped coverage amounts of $50,000 (if on Medicaid), $250,000, or $500,000.

Opt-Out Options: Medicare recipients can opt out of PIP medical benefits entirely. They would rely on Medicare for accident-related medical expenses.

Attendant Care Limits

Starting July 1, 2021, a new rule caps in-home, family-provided attendant care at 56 hours per week. This means if a family member takes care of you at home after an accident, the insurance will only cover up to 56 hours weekly.

This change aims to control costs and prevent potential fraud but could impact families relying heavily on in-home care.

Medicare-Based Fee Schedule

From July 1, 2021, Michigan adopted a Medicare-based fee schedule. This means doctors, hospitals, and other medical providers must align their charges with a percentage of what Medicare pays. This change aims to reduce excessive medical billing and, ultimately, insurance premiums.

Bodily Injury Liability Coverage

As of July 2, 2020, drivers must carry bodily injury liability insurance with minimum limits of $250,000 per person and $500,000 per accident. However, you can opt for lower limits of $50,000 per person and $100,000 per accident.

These changes aim to balance cost savings while ensuring adequate coverage. Next, we’ll discuss how Michigan’s no-fault insurance works and the claim process.

Frequently Asked Questions about Michigan No-Fault Auto Insurance

How does Michigan’s no-fault insurance work?

Michigan’s no-fault insurance means you get certain benefits from your own insurance company after an accident, no matter who caused it. These benefits include medical bills, lost wages, and other related expenses.

To get these benefits, you must file a claim with your insurance company. You need to submit an application for benefits within one year of the accident.

Important: Make sure you file with the correct insurance company. If you miss the deadline or file with the wrong company, you could lose your benefits forever.

Is Michigan a no-fault state anymore?

Yes, Michigan is still a no-fault state. This system has been in place since 1973 to help accident victims get quick and fair compensation without lengthy lawsuits.

There have been some changes, though. Since July 1, 2020, drivers can choose their level of Personal Injury Protection (PIP) coverage. You can still opt for unlimited coverage, but you can also choose capped options like $50,000 (if on Medicaid), $250,000, or $500,000.

Do insurance rates go up after a no-fault accident in Michigan?

Not necessarily. Since Michigan is a no-fault state, your insurance company pays your benefits regardless of fault. However, if you have a history of accidents or other risk factors, your rates could still go up.

It’s always a good idea to compare rates. Some companies may have better rates for drivers who have been in an accident.

Conclusion

Navigating Michigan’s no-fault auto insurance system can be complex, but understanding its key features and recent changes is crucial. Whether you’re dealing with medical bills, lost wages, or property damage, knowing what your insurance covers and how to file a claim can make all the difference.

At Eve Insurance, we specialize in helping Michigan drivers find the right coverage for their needs. We offer custom insurance options custom to your unique situation, ensuring you get the protection you deserve. Whether you’re looking for comprehensive coverage or specific add-ons like Personal Injury Protection (PIP) and Property Protection Insurance (PPI), we’ve got you covered.

We believe in giving back to the community that supports us. That’s why we’re actively involved in local initiatives and events, aiming to make a positive impact in Michigan. Our commitment to community involvement reflects our dedication to not just being an insurance provider, but a trusted neighbor.

And because accidents and questions don’t keep business hours, our 24/7 customer service is always available. You can reach us anytime for assistance, whether it’s to file a claim, ask a question, or get a quote.

For more detailed information on how Eve Insurance can help you with your auto insurance needs, visit our Auto Insurance page.

Understanding Michigan’s no-fault auto insurance is essential for every driver. With Eve Insurance, you have a partner who not only provides comprehensive coverage but also stands by you through every step of the process.