In this installment of The Brouwers Agency No-Fault reform email series we’re going to get into the ‘what should I do’ question.
Not really. But sort of.
The truth is, we can’t tell you what to do. It’s a personal decision for your family and your budget. Truly the only reason to elect anything less than unlimited is to save money. The unlimited coverage is the best, and I expect you’ll see most insurance industry employees (agents, adjusters, underwriters, etc) stay with unlimited. We’ve seen the big claims, we know how bad it can be. That said, it might not be for everyone. So here is what we know today:
- People keeping unlimited medical coverage will see their MCCA fee (which you can find on your current policy) reduced from around $220 per car per year to $100 per car per year. So folks with unlimited coverage will see a savings of $120 per year per car in that line item. Not bad, and you get to keep the best coverage in the country.
- Anyone who elects less than unlimited coverage ($250,000, $500,000, or an opt out) will see that MCCA fee go from $220 per year per car to $0. A $220 per year savings per car – even if you keep $500,000 in coverage. They will also see savings in their Personal Injury Protection line item, but that savings is undetermined at this point and likely to be pretty minimal. The cost will not go to $0 because there are some benefits that were not reduced in the new law (like wage loss coverage if you’re hurt in a car accident).
So what do you pick? That’s up to you, but we can provide some guidance. If you are on Medicare or have Qualified Health Coverage, you can opt out of the medical coverage. That means you have to rely on your medicare or health coverage for all auto accident injuries. We probably wouldn’t recommend the full opt out. There are still deductibles, co-pays, etc that you may incur. Further, neither Medicare nor your HMO will pay for long term care if you’re critically injured. There may be limitations in rehabilitation coverage as well.
On the other hand, going with $250,000 or $500,000 still provides you with a $220 per car reduction in your MCCA fee, a reduced personal injury protection premium, and a lot of coverage for expenses your health coverage may not pay for. So if you do choose to reduce below unlimited, those would be your best options – with an opt out or an exclusion as something we simply wouldn’t advise.
One more post to go, read that here: https://www.brouwersagency.com/no-fault-reform-increased-liability-exposure/