Michigan legislators recently revamped no-fault insurance laws enacted nearly 50 years ago. The reform aims to reduce insurance costs and increase the number of insured drivers on the roads, which hopefully will lower the costs of the system and taxpayers in general. It is important to understand your options under the new no-fault insurance laws and choose the personal injury protection (PIP) coverage that is best for you.
The following is a brief overview of the no-fault reform in Michigan. To discuss your personal situation following a crash-related injury, contact our car accident attorneys at Michigan Injury Lawyers directly.
Previous No-Fault Requirements in Michigan
Since 1973, the law in Michigan required drivers to carry no-fault insurance coverage. This was unlimited no-fault coverage, which meant your own insurance policy should cover the lifetime costs of your accident-related injuries, no matter who was to blame for the crash. The coverage also provided benefits for wage loss, household services, personal care, and more.
Lawmakers intended that unlimited no-fault coverage would reduce the need for personal injury lawsuits stemming from car accidents, as well as unpaid medical bills of car accident injury victims.
Unfortunately, the cost of this coverage became unreasonably high in many situations. Policyholders saw regular increases in premiums as the costs of medical care rose, and some drivers chose to allow their coverage to simply lapse. This resulted in many injured crash victims needing medical care with little to no coverage for the extensive bills that would follow.
Reforms Effective July 2, 2020
As of July, the requirement for drivers to purchase unlimited coverage is no more. If you must purchase or renew an insurance policy after July 1, 2020, you will have new options for your auto insurance coverage.
- Unlimited PIP coverage
- PIP coverage up to $500,000
- PIP coverage up to $250,000
- PIP coverage up to $250,000 with certain medical exclusions, which is available if you have qualified health coverage that will cover car accident injuries
- PIP coverage up to $50,000, which is available if you are enrolled in Medicaid
- Opting out of PIP coverage completely, which is possible only if you and your household members have Medicare coverage or qualified health coverage for car accident injuries
Because drivers can select lower coverage limits, there is a greater chance that their policies will not be enough to cover all of their medical expenses should they sustain a catastrophic injury in a crash. It is wise to stick with unlimited coverage if possible to ensure that you have the coverage you need should a devastating injury occur.
There are other changes to Michigan auto insurance laws, including coverage for bodily injury and property damage to others in an accident that you caused.
- Bodily injury coverage will default to $250,000/$500,000
- If you would like to select a lower policy limit, you must sign a form, and the minimum amount of bodily injury coverage is $50,000/$100,000
- Property damage coverage is set at a minimum of $10,000
You can adjust your PIP and additional coverage each time you renew your insurance policy, and insurance companies must fully inform consumers of their options.
The new law also requires insurance companies to reduce premiums for consumers, and the percentage of reduction will depend on the coverage you select. Insurance companies also may no longer use non-driving factors to determine premium rates, including sex, marital status, occupation, postal zone, credit score, and more. The goal is to create savings for consumers to encourage more drivers to carry adequate auto insurance coverage.
Suing for Excess Medical Costs
We expect that many drivers will reduce their PIP coverage to lower their premiums. However, what happens if you sustain a severe injury, and your medical costs exceed your new $250,000 PIP limit? Medical expenses can add up quickly, especially if you need ongoing care. If you did not cause your crash, how do you seek compensation if your medical costs exceed your policy limits?
If another driver or party was responsible for causing the accident, you can file an injury claim against that driver for your excess losses. It is important to remember that other drivers might opt for less coverage as well, which can cause an issue for injured crash victims.
- You have $500,000 in PIP coverage
- You suffer a paralyzing complete spinal cord injury, and your estimated lifetime medical costs are more than $2 million
- You file a claim against the negligent driver, but their bodily injury coverage is only $50,000 per accident victim
- You can receive up to $550,000 in benefits between your coverage and the driver’s, leaving you with nearly $1.5 million in uncovered losses
Because there is the risk that you will not have adequate coverage of your medical expenses, it is more important than ever to have a qualified Michigan car accident lawyer on your side. The right lawyer will evaluate your situation and your potential losses, and advise you of the best way to obtain the compensation you need and deserve.
Our lawyers know that you can ensure many losses from car accident injuries, including:
- Emergency room visits
- Diagnostic testing
- Hospital stays
- Surgical procedures
- Rehabilitative therapy
- Medical equipment
- Home assistance
You also might have permanent impairments that require ongoing care for the rest of your life, so the concern over medical expenses will never go away. We are here to relieve that stress and find solutions that allow you to move forward with the financial support and benefits you need.
Contact Our Michigan Car Accident Lawyer for Help
The legal team of Michigan Injury Lawyers knows that changing insurance laws and requirements can be confusing. However, it is critical to have coverage that will sufficiently protect you should you suffer injuries in a car crash. Even if you have substantial coverage, you cannot control what coverage other drivers select, which can lead to a difficult situation following a crash. Do not hesitate to contact us or call (888) 454-0801 for your free consultation today.