As we have written about in previous posts, no-fault auto reform kicks in on July 2, 2020. Before the reform, it was mandatory for drivers to carry unlimited Personal Injury Protection (PIP) benefits. However, the new reform measures allow Michigan drivers to choose from five different levels of PIP coverage and potentially reduce PIP benefits.
- Unlimited PIP coverage
- $500,000 limit
- $250,000 limit
- $50,000 limit (with qualifications)
- Opt-out of PIP coverage entirely (with qualifications)
The Qualifications
While the $50,000 limit may seem appealing, it is only available drivers who are on Medicaid. Also, your spouse and anyone else who lives in your household must either be on Medicaid or have some other qualifying health insurance. To opt-out entirely, you, your spouse, and all relatives who live with you must be covered by Medicare or other qualified health insurance to be eligible.
When to Make Your Choice
Before your next auto insurance policy renewal, you will be given an opportunity to select the level of PIP coverage you want to pay for. If you don’t make a selection, your policy renews at the default level of Unlimited coverage. However, before you make a choice, it is important to know the risks you take by reducing your coverage.
Unlimited Covers You Completely
Unlimited No-Fault PIP medical benefits cover you for the rest of your life for your needs following a life-altering catastrophic car accident. Victims of such accidents can sustain traumatic brain injuries and spinal cord injuries, and a host of other outcomes. Unlimited No-Fault medical benefits ensure that car accident victims will have access to the medical treatment, care, services, and specialists necessary for their care, recovery or rehabilitation.
Most regular health insurance plans have high deductibles and expensive copayments with your regular health insurance plan that no-fault PIP coverage does not. In addition, most health insurance plans place limits of medical services that car accident victims commonly require, including:
- Residential care
- Attendant care by an agency
- In-home attendant care by a family member
- Prescriptions
- Hospitalization
- Doctors/lab
- Rehabilitation services
- Transportation
- Home purchases/modifications
- Prosthesis
- Equipment and vehicle purchases/modifications.
- Case management
Let’s face it. After a serious accident, medical costs can be astronomical. $100,000, $250,000 or even $500,000 in PIP coverage can be exhausted in a matter of weeks. Once your PIP benefits are used up, health insurance or suing the at-fault driver (and hoping that they have the financial means to pay) are your other options. Otherwise, you’ll be relying on Medicaid or Medicare, spending your family’s assets or going without necessary medical care and treatment.
Our Recommendation
No-Fault Auto Insurance reform has been on the horizon for a while now. It has allowed us to gather information, discuss the issue with other insurance professionals, and attend industry seminars on the topic. As a result, it is our recommendation that drivers choose to keep unlimited PIP medical protection. The savings you’ll see from reducing your coverage is simply not worth the risk of an accident that could impact you (and your family) medically and financially for the rest of your life.
Based on our research and experience, we strongly recommend that you keep your Unlimited PIP benefit. Call us to learn more and to discuss the risks you’ll be taking to reduce PIP benefits. E&Y Insurance serves clients in Troy Michigan and the surrounding areas of Birmingham, Rochester, Rochester Hills, Royal Oak, Sterling Heights, Shelby Township and Macomb.
