Changes in No-Fault Auto Insurance

What’s different with Michigan’s no-fault auto insurance reform law?

The biggest change we’ve seen with Michigan’s no-fault auto insurance law is the power of choice. Prior to July 2^nd of this year, everyone had unlimited Personal Injury Protection (PIP) coverage tied to their policy. Now, consumers have the ability to choose their level of PIP coverage. Options still include unlimited, but you can now drop to $500,000, $250,000, or you can opt out of the medical portion altogether if you have a qualifying health plan.

How we’re coaching our clients:

The ability to choose the level of PIP coverage you want may be desirable – but after factoring in your current financial situation and personal risk tolerance, is saving a couple hundred dollars every six months actually worth it? What happens if you’re severely injured in an auto accident and your medical bills exceed your new limit? Will your health insurance be able to cover those bills? What if you need disability coverage?

Maintaining unlimited medical benefits on your auto policy guarantees you’ll be fully covered in the event of a catastrophic accident. If your needs go beyond a hospital visit following an accident, you’ll be covered.

We encourage our clients to consider their personal risk tolerance and whether or not saving a minimal amount of money is worth rolling the dice for. Nearly 99% of the time the answer is no – it’s not worth rolling the dice for. There wouldn’t be enough of a financial impact.

That’s why we’re coaching our clients to keep unlimited medical benefits within their policy. This is all new – we don’t know how case law is going to react. Sure, you might save a couple hundred dollars every six months. But we don’t know when an accident is going to happen or how bad it’ll be. When preparing for the unknown, especially when it comes to your health and well-being, you want to be as prepared as you can be.

It’s also important to consider limitations on your existing health plan. For example, Medicare will not cover things like home modifications if someone becomes paralyzed. In-home care, case management services, and handicap accessible attendant care are all examples of things that either have limited or no coverage at all. Unlimited PIP benefits guarantees coverage for these types of services.

Questions to consider when making decisions about your auto policy:

• What is your personal risk tolerance?
• What is your current financial situation?
• Does your current health plan cover services beyond a hospital visit?
• Is saving a few hundred dollars worth the risk of not having coverage when you need it?

Final thoughts:

With the recent change in Michigan’s no-fault auto insurance, many people have taken to the internet to get quotes. It’s important to not rely on online services alone when purchasing insurance. We find that many people don’t realize the type of coverage they end up electing. When getting a quote, make sure you’re having a conversation with an actual agent. Online platforms may show you the cheapest price simply to get you to change providers – but it’s important to remember, cheaper isn’t always better. Make sure you’re working with a reliable, skilled agent who can help customize a solution for you. That way, you know exactly the type of coverage you’re getting and what you’re paying for.

If you have any questions on this topic, don’t hesitate to reach out to the Laurent Insurance Group at (517) 668-1600. Remember, we have your best interest in mind all the time.