Michigan No-Fault Auto Insurance Reform is Not an Excuse to Make Dangerous Choices

Michigan’s no-fault insurance reform has been in effect since July 2020, and there is still a lot of confusion as to whether its cost-savings are worth the risk of lowering your Personal Injury Protection (PIP). 

If you’re new to the state or have just let your insurance agent (preferably, here at Autumn Insurance) handle the details, you should know that Michigan drivers are still required by state law to have a no-fault automobile insurance policy, including PIP benefits. 

Amid much hoopla and media coverage, Michigan Auto Insurance Reform passed in Lansing in the summer of 2020, giving state drivers a choice in PIP levels of coverage, with a total of six options.  

But those new options of lowering PIP limits to save money has Autumn Insurance President and CEO Curt Rager concerned about risk vs. reward.  “I see this as a further divide of two buyers — those who want protection and those who want to save money. At Autumn, we recommend that people maintain their unlimited PIP benefits,” he advised.  “We have much better ways of saving customers’ money than decreasing this benefit, which I feel is potentially dangerous.” 

History of Required PIP in Michigan

Michigan’s relationship with required PIP auto benefits goes back to 1973. The original idea was to give Michiganders PIP benefits to those who qualified, guaranteeing lifetime medical benefits for treatment related to auto accidents. Originally it sounded like a boon for Michigan drivers concerned about escalating medical costs, but it also meant a drastic increase in lawsuits, driving premiums higher and higher. Michigan still has one of the top five most expensive auto insurance rates in the nation. 

PIP Coverage Choices

Insurance is always about choices. Our job at Autumn is to not only make those choices easier for you but to make sure those choices are the safest you can make — for yourself and your family.  

If you chose a PIP AE option with less than unlimited coverage — or the $250,000 PIP Exclusion — you should be evaluating your own personal risk resulting from these choices.  

Questions you need to be asking yourself are these: What happens if you’re severely injured in an accident and your medical bills exceed your new coverage limit? Do you really have enough health insurance to cover those bills? What if you can’t work? Do you have disability insurance coverage, and if you are the subject of a lawsuit, do you have money put aside? 

“Health insurance isn’t equipped to cover auto accidents,” said Rager. “There are much better ways to save money than lowering your coverage to save a few dollars that aren’t so risky. These decisions could end up bankrupting you if you or a family member were involved in a bad accident.”  

Autumn Insurance recommends you take these steps: 

  • Take a thorough look at your policy.  PIP is only one of many coverages that are a part of your auto insurance policy. You’d be surprised how many people do not know what their coverages are. 
  • Be careful about changes.  When you reduce your policy coverage or change your limits, cost is not the only determining factor. Lower coverage amounts could affect your investments, budget and savings negatively as the result of a traumatic accident. 
  • View the PIP selection form. (PDF – Michigan.gov)
  • Learn how to fill out the PIP form. (PDF – Michigan.gov)

With all the variables which currently exist in Michigan’s No Fault Insurance Reform, we ask you to call the experts at Autumn Insurance who can customize an auto insurance plan for you and your family at 248-478-1177. 

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