N. Michigan Attorney Breaks Down Changes to Michigan’s No Fault Insurance Law

Changes go into effect July 1

Big changes to Michigan’s no fault insurance go into effect this week for drivers.

Last spring, the bipartisan auto insurance reform bill was signed into law and goes into effect July 1. 06 29 2020 Mi Auto Insurance New Laws Pkg 5

“Up until the changes, Michigan was the only state that required you to have unlimited medical coverage for personal injury protection,” said Frederick Stig-Nielsen, a staff attorney with Jesse L. Williams Law and Advocacy Center in Benzonia.

Now Michigan drivers have the option to choose their level of personal injury protection (PIP). PIP is what takes care of your medical expenses in the event of an accident.

Drivers have several options in PIP:

  • keep the unlimited option
  • $500,000
  • $250,000
  • $50,000 (only for those on Medicaid)
  • opt out completely (only for those on Medicare Part A & B)

Each PIP option comes with a level of premium reductions.

“Under the no fault law, if you were in an accident, you’d go to your insurance company and you were covered not only for your current medical expense, but for your future medical expenses,” Stig-Nielsen said.

He says he know it may be tempting for many drivers to drop their coverage to save some money, but in the event of an accident could cause even more financial troubles.

“It’s really about managing the risk for you as an individual or you as a family,” Stig-Nielsen said. “By reducing your benefits your increasing your risk in the event of a severe accident, is your short-term savings at what cost and what potential risk?”

He says drivers should talk with their insurance agency about these changes, but also the amount of their bodily injury coverage.

“We’re not only reducing our own coverage in the event of an accident, but we are also exposing ourselves to additional liability should we be found at fault,” Stig-Nielsen said.

He says this should be a decision people don’t take lightly and take their time making.

“I would just encourage people to think twice about that,” Stig-Nielsen said. “You just never know what could happen and how expensive your injury could be.”