Under most no-fault insurance laws, every car owner must purchase some basic coverage in order for the state to issue license plates. In other words, it is against the law for a driver to not have insurance on their car. The advantages to this system are that in the event of in an accident, insurance will provide a certain amount of coverage to you even if you were at fault.
Recent changes to the laws in Michigan, which went into effect in July of 2020, have changed what, who and how much insurance policies will cover, as well as the protections at-fault drivers can expect. If you thought you had a good policy, make sure to check on the changes before signing a new policy. It may also be wise to read the fine print before deciding to opt out.
Car insurance under the old rules
Before the changes, Michigan’s no-fault insurance required the owner to buy a policy that had three parts:
- Personal injury protection (PIP), which provided coverage for reasonable medical costs with no maximum limit, including 85% of lost wages for up to three years, and up to $20 per day for household services such as yard work or housekeeping.
- Property protection, which paid up to $1 million for damage to the owner’s car or another vehicle, as well as to other property such as fences or buildings.
- Residual liability insurance protected the injured from a car accident except under certain cases, and allowed coverage up to a certain amount if you were at fault.
The new law
Under the new law, Michigan no-fault insurance does not provide lifetime benefits for medical care and now offers levels with caps on PIP, including an option for Medicaid recipients. There is also an opt-out option for applicants who have alternative forms of accident or health insurance. For these individuals, if they sustain injuries in an accident they must now look for PIP coverage through Assigned Claims, which will provide a maximum of $250,000 in coverage.
To receive compensation for pain and suffering from an at-fault driver, the definition of what is a serious injury has changed, and the injuries to the victim must pass certain criteria for the claim to succeed. In addition, the injured party must receive an independent medical examination (IME) from a doctor that the insurance company may choose.
For residents of Plymouth and surrounding areas, it is important to look at the changes to the law when purchasing insurance moving forward, and to know where to go to make sure that insurance will pay the maximum allowable settlement if they get into an accident.