Michigan’s Recent Automobile Insurance Changes – What You Need to Know

Michigan’s no-fault law has been in effect since October 1, 1973. The purpose of no-fault is to provide assured, adequate, and prompt payment of benefits to motor vehicle collision victims. However, the law has been dramatically changed, effective June 11, 2019. Some of the new provisions take effect immediately, while others have effective dates over the next couple years.

Under the new law, drivers still must maintain three types of auto insurance coverage: Personal Injury Protection (PIP) benefits, Property Protection Insurance, and liability coverage. All other coverage is optional, including collision.

Personal Injury Protection
Before the law was changed, people had only one option; that was to purchase the lifetime allowable expense benefit. This benefit included coverage for medical treatment, medication, and attendant care for injuries that arose from an auto accident. The biggest change in the new law is the option to buy various levels of coverage for these benefits . Staring July 1, 2020, you can elect to keep the unlimited benefits, or choose coverage with a maximum of $500,000, $250,000, or in some cases even less.

Also included in this benefit is “attendant care.” It has long been clear that family members may be paid for the provision of care to injured spouses, parents or children (this is attendant care). Under the new law, effective July 1, 2020, family provided attendant care may be limited to 56 hours/week.

Property Protection Insurance
This insurance covers damage you caused to another’s property. This remains unchanged.

Residual Liability Insurance
Under the old law, you had to buy a minimum of $20,000 in coverage for any one person injured, and at least $40,000 in coverage for all persons injured in any one accident. Starting July 1, 2020, the default minimum will be $250,000 per collision, however you may be able to elect down to a minimum of $50,000 in coverage.

WORD TO THE WISE

Under the new law you can still purchase optional insurance called “uninsured” and “underinsured” motorist coverage . These coverages will provide compensation to you, in t he-event you are the victim of a collision caused by a driver who does not have insurance, or has less insurance than you. As it is optional, this insurance is often overlooked. However, this insurance provides benefits to you in the event of an unfortunate collision, and we recommend it. Also, most of the time this insurance is very inexpensive to add to your policy.

We thank you for being a valued client of our office, and trusting your legal matters to us. As always, we are happy to provide a free consultation regarding your auto insurance related matters.