New Insurance Changes in Michigan
Beginning July 2, 2020, Michigan drivers will have options when it comes to coverage levels for minimum liability insurance requirements. To lower auto insurance costs for Michigan drivers, Governor Gretchen Whitmer passed auto insurance reform legislation strengthening consumer protections for MI drivers. This improved no-fault system will allow drivers to choose their coverage levels, in turn, cutting costs. Starting this summer, drivers will have a choice in the level of medical coverage attached to their auto insurance policy.
Starting July 2, drivers will be able to choose from the following Personal Injury Protection (PIP) coverage options:
- Unlimited PIP coverage
- $500,000 coverage limit
- $250,000 coverage limit
- $250,000 coverage limit with PIP medical exclusion(s). Applies to drivers who already have private health coverage that covers injuries related to an auto accident, or those whose spouse or household relatives have a qualifying health plan that covers injuries related to an auto accident.
- $50,000 coverage limit. Applies only to Medicaid recipients, or those whose spouse or household relatives have a qualifying health plan that covers injuries related to an auto accident.
- No PIP coverage. Applies only if drivers, their spouses, and all household relatives have Medicare or a qualified health insurance plan.
Michigan drivers will also be happy to know that starting July 2, the state will mandate insurance companies to reduce PIP premium rates for at least eight years.
The lower coverage you receive, the higher the average price reduction.
- Unlimited coverage would receive on average a 10% reduction
- $500,000 in coverage would reduce on average by 20%
- $250,000 in coverage would reduce on average by 35%
- $50,000 in coverage would reduce on average by 45%
- Individuals with Medicare or qualified health insurance could opt out and receive a 100% rate reduction on certain portions of PIP, depending on their individual circumstances. MCCA deficit fee would still apply (MCCA has announced the deficit fee is $0 for 2020).
Other changes that are set to take effect on July 2 include:
- Some personal factors will no longer be used to set insurance rates for personal policies. These variables include your postal code, credit score, homeownership status, level of education, and occupation.
- The state will increase minimum liability coverage limits to $50,000 per person and $100,000 per accident. If you do not choose this new minimum liability coverage limit, your policy will default to $250,000 per person and $500,000 per accident. Policyholders will be sent a new selection form at each renewal to opt into lower coverage limits.
- Policyholders will be able to select PIP coverage at each policy renewal.
Visit our page on Michigan’s new auto insurance law for more information and other policy changes that will take effect in July 2020.