In May 2019, Michigan’s Legislature passed a bill that made sweeping changes to Michigan’s No-Fault Insurance Law. I’ll be the first to admit that Michigan’s old No-Fault Insurance Law had a ton of issues. I’ll also admit that Michiganders paid extremely high insurance premiums under the old law. However, what Michiganders are going to get out of this new law is far worse than high premiums. Plus, I highly doubt your premiums are going to be much lower. Here are some of the big things you, as a Michigan driver, need to know about the changes and they all have to do with the medical benefits you receive if you’re injured and who pays for them. So, they are pretty dang important.
One of the reasons that premiums were so high under the old law is that if you were injured in an auto accident, you received unlimited life-time medical benefits. For auto insurance policies issued or renewed after July 1, 2020, you will be allowed to opt out of unlimited lifetime medical benefits. Opting out is a mistake for so many reasons. The biggest is that if you are catastrophically injured in an auto-accident, your medical bills will only be covered up to a certain dollar amount. The lowest amount of coverage allowed under the new law is $50,000. $50,000 can be used up in one surgery. Let that sink in. One surgery. After that, you’re on your own. You’ll have to pay out-of-pocket, hope your health insurance covers you (check to see if there are auto accident exceptions or exclusions under your health insurance plan, if there are, you’re out of luck), make a claim under Medicare or Medicaid (the new law is going to stress Medicare and Medicaid even more than the systems already are), or make a claim under your “underinsured motorist” policy (I hope you have one!). If you didn’t cause the accident, you can sue the at-fault driver. BUT, if you sue the at-fault driver, your health insurance company, Medicare and/or Medicaid can all assert liens against the recovery in that lawsuit. That means you’ll be suing to get your health insurer paid and will most likely end up with little to nothing in your own pocket for your “pain and suffering.” Sound great, right! Yeah, not so much.
Under the old law, unlimited life-time medical benefits also included paying a family member to provide “attendant care services” to you at home by doing things like seeing that you take your medications, helping you bath, monitoring you for falls, and helping you use the restroom. Under the old law, your family member could be paid around the clock for providing that care. Under the new law, if a family member provides that care to you in your home, your family member can only be paid for 56-hours-per week. If a person needs care above and beyond 56-hours per week, they can still get it, but it will have to be received from a commercial agency. Everyone likes strangers in the bathroom with them! Oh, you don’t. Ok then.
How do you protect yourself? Simple. I would recommend purchasing “unlimited” or “no limit” personal injury protection (“PIP”) insurance and get a policy that is “uncoordinated” with your health insurance. That way if you are catastrophically injured in an auto accident, you will receive life-time medical benefits. I know, you’re thinking to yourself, “but I want to save money on my premiums!” I have news for you, the insurance companies are going to find a way to make back the money that people were forced to pay in premiums under the old law. You’re going to see it in your “third-party” premiums. “Third-party” premiums are for claims made against you when you cause an auto-accident and someone gets injured. My guess is that this new law isn’t going to save Michigan drivers any money and any money that is saved in premiums will be far less than what drivers will have to spend if they are in an life-altering injury. Bottom line, protect yourself and know what you’re buying.
Michigan’s No-Fault Law is complex and there is no way to cover all its intricacies here. If you have any questions about how it works or if you’ve been injured in an auto accident and need help, please do not hesitate to call us at (248) 649-6203.
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