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No Fault Reform – PIP Options

Welcome to Part 2 of The Brouwers Agency No Fault series!  We know you are excited! Today we’ll take a shallow dive into the changes and options available to you as a result of the new insurance law in Michigan.

About 90 days before your car insurance renewal after July 2, 2020 you will receive a letter giving you options to select your Personal Injury Protection level.  This is a form that you will have to complete every single year and it will have to be returned (in some cases, you will be able to do this online). If you ignore the form your policy will renew with the unlimited medical benefit.  Essentially you will have three options:

  1. Keep your unlimited medical benefits.  This is how the policy has been since the 1970’s.  One note is that the state MCCA Fee, which you see now on your policy coverage, will be reducing from approximately $220 per car per year to $100 per car per year.  So even if you keep the unlimited medical benefit you will have savings in that line item of $120 per car per year.
  2. Reduce your medical coverage to $500,000 or $250,000.
  3. Opt out or exclude medical coverage on the auto policy altogether.  This can only be done if you have a letter from your health insurance company that says you have “qualifying coverage” or your entire household is enrolled in Medicare parts A and B.
  4. But wait, you said there were only three options!?!? If your whole household is on Medicaid you can reduce down to $50,000 personal injury protection coverage.

Most folks will look at this as a way to save money.  So what sort of savings can we expect? The truth is, we don’t know yet.  We are waiting on the State of Michigan to approve all the new rates from every insurer in Michigan.  A big task! That said, we have some insight and we’ll share that in our next blog. Read that here: https://www.brouwersagency.com/no-fault-reform-how-much-will-i-save/

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