July 1, 2020, Michigan No-Fault Insurance Changes

Consumer PIP Selection Coverage – In over 42 years, the Michigan No-Fault insurance law has required drivers to buy “unlimited” PIP (personal injury protection benefits), the medical benefits, which covers any and all car accident-related medical care and treatment, as long as the services are “reasonably necessary” for the injured person’s care, recovery or rehabilitation. Under the new law, after July 1, 2020, drivers must buy “unlimited” coverage or select whether he or she would like to limit coverage at $50,000 (only if enrolled in Medicaid), $250,000 or $500,000. Our law firm recommends the consumer select unlimited PIP coverage to adequately protect themselves and their household members.
Opt-Out of PIP Coverage– Michigan drivers who are on Medicare, will have the option after July 1, 2020, to opt-out of PIP medical coverage. The legislature intended that these drivers would turn to the Medicare insurance to pay for their medical bills for injuries suffered in a car accident. 

Attendant Care Benefits Changes – Under the Michigan No-Fault insurance law after July 1, 2021, auto insurance companies will not be required to pay for more than 56 hours per week for family provided attendant care in the home.

Qualified Health Care Coverage – In order for Michigan drivers to be able to select certain PIP coverage levels and options that is available after July 1, 2020, drivers and/or their family members may need to have traditional health insurance coverage that qualifies as “qualified health coverage.” 

“Excess” medical expenses – Under Michigan’s No-fault insurance law, drivers whose accident-related medical bills exceed the relevant PIP medical benefits coverage level in the auto insurance policy, they will be able to sue the at-fault driver in a third-party tort lawsuit for payment of their “excess” present and future medical bills. Excess means that which was not covered by PIP insurance coverage.

“Excess” Wage Loss – Under Michigan’s No-fault insurance law, drivers whose accident-related wage loss exceed the relevant PIP wage benefits coverage level in the auto insurance policy, they will be able to sue the at-fault driver in a third-party tort lawsuit for payment of their “excess” present and future wage loss. Excess means that which was not covered by PIP insurance coverage.

Medical Charges are limited to a Medicare-based fee schedule – Starting July 1, 2021, doctors, hospitals, clinics and other medical service providers will only be reimbursed for charges based on the new Medicare-based fee schedule, which will be only a multiple percentage of what is payable under Medicare.

Bodily Injury Liability Coverage – On or after July 2, 2020, drivers will be required to carry bodily insurance liability insurance coverage in the amount of $250,000 to cover bodily injury to or death of 1 person in any 1 accident and “not less than $500,000 because of bodily injury to or death of 2 or more persons in any 1 accident.” Importantly, however, the law also provides that a driver “may choose to purchase lower limits” of $50,000 and $100,000. Our law firm recommends that the consumer buy at least $250,000/$500,000 in coverage to protect themselves.

Michigan Catastrophic Claims Association – Under the new Michigan No-Fault PIP medical benefits coverage levels, the Michigan Catastrophic Claims Association (MCCA) will pay for the medical costs of catastrophically injured car accident victims only if “unlimited” coverage was selected at the time the auto insurance policy was purchased. Keep in mind, however, the MCCA will continue to be liable for catastrophic injury benefits payable under policies issued or renewed before July 2, 2020. 

Michigan Assigned Claims Plan – Any car accident victim who must claim Michigan No-Fault insurance benefits through the Michigan Assigned Claim Plan, which is designed to assign car insurance companies to provide mandatory no-fault benefits to victims who otherwise have no source of insurance coverage, will be limited to a cap of $250,000 on medical benefits.

Mini Tort – After July 1, 2020, the maximum mini tort recovery amount will increase from $1,000 to $3,000 per car accidents.