Personal Injury Protection (PIP) is a no-fault insurance coverage that offers financial protection to Michigan auto accident victims, ensuring they receive timely medical care and support. It covers the medical expenses, rehabilitation costs, and lost wages of those injured in vehicular accidents, regardless of who was at fault. 

However, the Michigan PIP reform, which took effect on July 1, 2020, has brought significant changes that reshaped how auto insurance works in the state. It is essential to understand these changes, as they affect insurance costs and the level of coverage available to accident victims. Let our seasoned personal injury attorney guide you on the updates in Michigan PIP, helping you make the right insurance decisions for your future.

Options for PIP Coverage 

In the past, every Michigan driver was required to carry unlimited medical benefits as part of their auto insurance policy. However, now you have the choice to opt for lower coverage limits. The available PIP coverage options include:

• Unlimited Coverage. Unlimited coverage remains the highest and most comprehensive level of PIP medical coverage available. Under this option, your insurance company will cover all reasonable and necessary medical expenses related to an accident without any predefined monetary limit. No matter how severe your injuries or how extensive your medical treatment is, your auto insurer will fully cover the costs.
• $500,000 Coverage. It provides up to $500,000 in PIP medical benefits per person per accident. While it is a substantial amount of coverage, it is less comprehensive than unlimited coverage and may not cover all expenses in severe cases.
• $250,000 Coverage. With this coverage, your insurance company will pay up to $250,000 in PIP medical benefits per person per accident. However, it’s important to note that this option comes with limitations and exclusions that can affect who is covered.
• $250,000 Coverage With Exclusions. It is similar to the $250,000 coverage but includes exclusions for certain individuals with qualified health coverage that can cover auto-related injuries. 
• $50,000 Coverage. It offers up to $50,000 in PIP medical benefits per person per accident, an option for those seeking the lowest possible premiums. While it provides some coverage, it may not suffice for extensive medical treatment or severe injuries.
• Opt-Out of PIP Medical Coverage. In some cases, individuals with qualified health coverage or whose household members have certain levels of coverage may opt out of PIP entirely. However, this option comes with specific eligibility criteria.

It’s essential to carefully evaluate your PIP medical coverage options based on your circumstances, budget, and risk tolerance. The level of coverage you choose will directly impact the financial support you receive in case of an accident. Seeking legal guidance from a local Muskegon personal injury attorney can help you identify which option best fits your specific needs.

Reduction of PIP Premiums

Under the Michigan PIP update, each insurance company is required to reduce the statewide average PIP medical premiums for a duration of eight years. The premium reduction varies depending on the level of PIP coverage selected by policyholders. Here are the specific percentage reductions for each PIP coverage option per vehicle:

• $50,000 PIP – 45% or greater
• $250,000 PIP – 35% or greater 
• $500,000 PIP – 20% or greater 
• Unlimited PIP – 10% or greater

The intent behind these mandated premium reductions is to ease the financial burden on Michigan drivers while still allowing them to choose the level of PIP coverage that suits their circumstances. 

Introduction of Fee Schedule 

The fee schedule essentially sets limits on the fees that medical providers can charge auto insurers for medical services rendered to accident victims covered by PIP. These limits are designed to ensure that the costs associated with medical treatment, procedures, and services are reasonable and within established boundaries.

Implementing a fee schedule can make PIP medical coverage premiums more affordable for policyholders. By controlling the costs associated with medical services, auto insurance companies can offer coverage at lower premium rates, which can be particularly beneficial for those who have been grappling with high auto insurance premiums in the past.

It’s important to emphasize, however, that the fee schedule does not compromise the quality or availability of medical services to accident victims. Existing and future accident victims will continue to receive the necessary medical treatment and care as required by their injuries. 

Seek Guidance From Our Michigan Auto Insurance Law Expert

With the new Michigan PIP, many individuals, especially retirees with Medicare coverage, might consider opting out, while others may be tempted to reduce their medical coverage to save costs. However, it’s essential that you thoroughly understand the recent changes to make informed decisions regarding your auto insurance policy. Don’t underestimate the impact your coverage choices can have on your life. 

Shafer Swartz PLC is offering a complimentary policy review service for our clients and anyone seeking guidance. Simply obtain a PDF copy of your most recent policy and declarations sheet, email them to us at info@wemakeitright.com, and let our experienced Muskegon personal injury attorneys, David Shafer or Matthew Swartz, provide you with their expert insights on your coverage. Don’t wait until you find yourself facing unexpected consequences after an auto accident. Contact us today at 231) 722-2444 or here.