Michigan’s automobile liability insurance system has long been one of the most expensive in the country. Drivers across the state had to trade affordability for the depth of coverage offered by Michigan no-fault policies. No-fault policies have long covered the medical costs of the policyholder regardless of fault, ensuring that people receive medical care even if the other driver doesn’t have insurance.
Now, some of the requirements for no-fault insurance in Michigan have changed, leaving many people worrying about what kind of protection they currently have. Understanding the changes to no-fault insurance can help you understand if you have to worry about changes in the coverage you can receive or the premiums that you pay.
What does no-fault insurance cover?
One of the unique and truly beneficial things about Michigan’s no-fault insurance law was how it did not put an upper limit or maximum coverage amount on medical payments related to injuries from a crash. An individual hurt in a crash, even one they caused, could have coverage for years of intensive, rehabilitative care through their automobile insurance policy.
This kind of coverage is particularly beneficial in cases involving traumatic brain injuries or spinal cord injuries. Even with health insurance, care for more severe injuries can become quite expensive. With deductibles, co-insurance and co-pays, people may have to worry about thousands of dollars of care costs. A no-fault policy will cover all the costs of medical care related to a car crash without any of those same financial responsibilities.
You’re in charge of the coverage you carry
For many years, anyone who wanted to legally register a vehicle in Michigan had to carry no-fault insurance on their vehicle. Under the new law, no-fault medical coverage becomes optional instead of mandatory. Drivers can select a specific amount of coverage instead of having only unlimited benefits available.
Depending on the health insurance that a person already has, it may be reasonable to reduce the amount of Personal Injury Protection (PIP) that they have on their policy. The state breaks coverage down into four tiers.
Those who want it can still continue to carry their standard policy with unlimited medical benefits. Other drivers can choose to limit their benefits to $500,000 or $250,000. Those who are currently on Medicaid or who have comprehensive health insurance that covers automobile accidents can opt for just $50,000 in PIP coverage.
It’s only natural to worry that this shift in policy could mean less coverage when you need it the most. However, because of the no-fault nature of coverage, you determine what protections you have in a crash, not the other driver. You can carry as much protection as you feel you need, up to the unlimited PIP that was long standard across the state.