Michigan No Fault Auto Insurance Reform Law

Michigan no-fault reform and what is means for Michigan auto drivers.

Our expert agents are ready and waiting to help walk through the best options for you!

We know the recent changes in the law can seem complex, and it is our goal as your agent, to provide you with the necessary information needed to make well informed decisions.

Thank you for your continued trust and partnership with Doyle & Ogden Insurance, your Single Source Solution.

What is Michigan No Fault Insurance?
Our no-fault laws have given Michigan drivers access to the most comprehensive insurance protection in the country if they are injured in an auto accident regardless of who is at fault.

The coverage that pays for medical bills, lost wages and more is called Personal Injury Protection (PIP). Currently, all drivers have unlimited, lifetime PIP limits.

Michigan no fault also allows customers to have their own insurance pay for damage to their vehicle, regardless of who the at fault party is to help reduce the number of claims that require litigation.

Insurance is a requirement is the state of Michigan, and that has not changed with these reforms.
Michigan No Fault Reform Overview – When Does it Start?
No Fault reform is giving Michigan residents more choice when it comes to auto insurance, with the hope that more options can result in lower premiums.

Under the law prior to no fault reform, Michigan residents enjoyed the most extensive medical insurance if they are involved in an accident, with lifetime unlimited Personal Injury Protection (PIP) coverage.

Starting July 2, 2020, you will now be able to choose other options for your PIP limit and your Bodily Injury limits. With these new options, the legislature has required rate reductions must be implemented by insurance companies when customers choose a lower coverage limit.

While this may be true, each policy will be affected differently. It is important to know; this rate reduction is ONLY on your PIP coverage and not on the overall cost of your policy.

In July 2021, additional provisions of the no fault law aimed at claim cost containment, are set to be triggered. These changes will institute a fee schedule on the amount medical providers can charge insurance companies for treatment of an auto related injury. Additional provisions set a limit to charges for attendant care provided to the injured party if done so by a relative.
Personal Injury Protection
Starting July 2, 2020, consumers will be allowed to choose the level of Personal Injury Protection (PIP) they would like.

The options will be $50,000, $250,000, $500,000 and continued unlimited coverage. In addition, there will be the option for individuals who qualify to opt out of paying for PIP coverage entirely.

Rate reductions depend on the limit you choose:
• Unlimited coverage would reduce on average by 10%
• $500,000 in coverage would reduce on average by 20%
• $250,000 in coverage would reduce on average by 35%
• $50,000 in coverage would reduce on average by 45%

Limited PIP medical coverages may not be enough to cover your medical expense. Once the chosen limit is reached, you may need to rely on other health coverage, which may not cover all medical, rehabilitation or attendant care costs. Medicaid, Medicare and traditional health plans do not cover any modifications you may need to make to your home or vehicle as a result of a serious injury. There are also things like deductibles and maximum out of pocket dollars that you could still be responsible for.

To make a change to your PIP coverage limit, you will need to complete and return the Michigan Selection of Personal Injury Protection Medical Coverage – Individual(s) form that your insurance company will send to you each year. Once you have chosen your desired limit, you do not need to return this form again unless you would like a further change.

Please see the section titled How Do I Select New Limits – Filling out No Fault Forms for help and more specifics on this form.
What Personal Injury Protection Limits You Can Choose?
As previously discussed, with the no fault reform, Personal Injury Protection (PIP) limit options are being introduced in Michigan for the first time.

As a reminder, currently all drivers have lifetime, unlimited PIP coverage and if you do not make any changes to your policy, you will continue to have that same limit.

Here is a high-level breakdown of the different PIP options and points to consider. We always recommend contacting your knowledgeable Doyle & Ogden agent if you wish to know more about your options.

OPTION 1: UNLIMITED COVERAGE
This is every insured drivers’ current limit, and if no change is made your policy will renew with unlimited coverage.

OPTION 2: LIMITED COVERAGE of $500,000

OPTION 3: LIMITED COVERAGE of $250,000
This is the option you choose to have some individuals in your household opt out of PIP coverage completely while allowing other drivers in the household to have a limit of $250,000 for PIP.

OPTION 4: $50,000
Named insured MUST be enrolled in Medicaid part A and B.
Other household members must have:
- Qualified health coverage letter providing coverage
- Also be enrolled in Medicaid
- Have their own auto policy
OPTION 5: NO PIP COVERAGE - OPT-OUT
All household members must have all of the following:
- Qualified health coverage letter providing coverage
- Already enrolled in Medicaid
- Have their own auto policy
When you select this option, it doesn’t affect the following coverage:
- Wage Loss
- Survivor Benefits
- Replacement Services
If any drivers opt-out qualifications change during the policy term, you will have 30 days to notify Doyle & Ogden Insurance of this change and request coverage be placed appropriately. During that time, the affected driver will have $2,000,000 in PIP coverage provided by the state. After 30 days, if no changes are requested by you, the driver will have NO PIP coverage.
Who Pays If You’re Injured? Order of Priority Changes
Starting in June of 2019, no fault reform changed how an injured person can find coverage for their bills.

Some insurance companies have continued to handle claims under the old laws while some have adopted the new rules. Please contact our office or your insurance carrier to determine what your specific carrier has done.

All insurance companies will adopt these new rules as of July 2, 2020. Click to view an easy chart regarding who’s policy pays in the event of an injury.

With no fault reform, it is possible that someone currently listed as a driver on your policy may no longer be covered for medical benefits. If a relative has been using your vehicle but does not currently reside with you or if there is someone who resides with you that is NOT your relative, please contact our office immediately to discuss alternative coverage arrangements.

Example of those situations that would require alternative coverage include:
- A household member, not related to you, who does not own and insure their own vehicle (friend, significant other, etc.)
- A member of your family currently on your policy who doesn’t live with you. This could include a student who is away at school and has taken steps to establish residency in their new city.
Bodily Injury Limits
With the Michigan no fault reform, new default bodily injury limits have been set.

Starting July 2, 2020, the law requires that all policies be issued with a $250,000 liability limit per person and $500,000 limit per accident, commonly seen as $250,000/$500,000.

If you already have those limits, or higher, there will be no change to your policy starting in July.

For all others, your policy will be increased to that amount automatically.

In addition, insurance companies will now be required to show you the pricing difference between each limit option right on the declarations page of your policy.

All insurance companies will be required to send you a form to review and sign should you wish to lower your liability limits.

Business owners with commercial auto policies should be aware that if you use this form to choose lower liability limits, it may create an issue for any contractual certificate requirements you have. Please reach out to your agent to review.

Please see the section titled How Do I Select New Limits – Filling out No Fault Forms for help and more specifics on this form.
How Do I Select New Limits – Filling out No Fault Forms
To help you make your choices, each year the state requires your insurance company send you an election form for your PIP and bodily injury choices.

IF YOU WANT TO KEEP YOUR COVERAGE THE SAME YOU DO NOT NEED TO COMPLETE FORMS.

When our team reviewed the forms, we wanted to help make it easier for our customers to understand how to complete them. As a result, we have a high-level explanation of what the sections mean, and how to complete the form.

If at any time in the process, you would like to talk to your agent, please don’t hesitate to call us at 616-949-9000.

Bodily Injury Form Example

Personal PIP Election Form Example

Business PIP Election Form

State of Michigan Auto Insurance Information

Frankenmuth Insurance

Disclaimer: The information, content and materials provided on this website has been prepared to the best of our knowledge and information available at the time of publishing; it is intended for general informational purposes only. The information presented here does not, and is not intended to, constitute legal or insurance advice and should not be construed as such. Contact your agent to understand your coverage needs or the Michigan Department of Insurance and Financial Services to obtain advice with respect to any particular insurance matter.

Michigan No Fault Auto Insurance Reform Law

Michigan no-fault reform and what is means for Michigan auto drivers.

Our expert agents are ready and waiting to help walk through the best options for you!

Get Answers to Your Questions!

What is Michigan No Fault Insurance?

Michigan No Fault Reform Overview – When Does it Start?

Personal Injury Protection

What Personal Injury Protection Limits You Can Choose?

Who Pays If You’re Injured? Order of Priority Changes

Bodily Injury Limits

How Do I Select New Limits – Filling out No Fault Forms

Additional Resources