New Personal Injury Protection (PIP) Options

In June of the Michigan Legislature passed historic changes to the Michigan Auto Insurance System.  The new law goes into effect on July 2nd, 2020.  For the first time in over 40 years consumers will have options on the amount of Personal Injury Protection (PIP) coverage that they purchase.  No longer will everyone in Michigan automatically be provided Unlimited coverage for their medical bills.

After July 2, 2020 consumers will be provided up to six different choices depending on their individual situations.  Below is a list of the coverage options, what is required to be eligible for each option and the risks rewards of choosing a limit different than “Unlimited”.  Prior to your renewal being issued you will receive a form in the mail to select your desired limit.

PIP OPTIONS

Option 1: Unlimited

This option provides the most coverage. It will pay for all allowable expenses for your care, recovery, and rehabilitation if you are injured in an auto accident.

Requirements to be able to choose Unlimited:

• None. Everyone can choose Unlimited

Risks:

• The premiums for this option will be higher than the other options, although the premium will be similar or slightly less than you are currently paying for your unlimited coverage

Benefits:

• PIP medical will cover costs that may not be covered by health insurance, such as rehabilitation and
  attendant care.
• This choice will significantly limit the risk that you will have out-of-pocket costs for your care.

 

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Option 2: Limited Coverage of $500,000

OR

Option 3: Limited Coverage of $250,000

If you choose one of these limits, this amount is the most your auto insurance company will pay per person per accident for an injured person’s expenses under PIP Medical coverage.

Requirements to be able to choose $500,000 or $250,00:

• None. Everyone can choose $500,000 or $250,000

Risks:

• Limited PIP medical coverages may not be enough to cover your medical expenses.
• If your PIP medical limit is reached, you may need to rely on other health coverage, which may not cover all medical, rehabilitation or attendant care costs.
• If you do not have other health coverage, you may be personally responsible for paying these expenses.

Benefits:

• Lower coverage limits have slightly less expensive premiums than plans with higher or unlimited PIP medical coverage.
• Up to the limit chosen, PIP medical will cover the cost of products and services that may not be covered by health insurance, such as rehabilitation and attendant care.

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Option 4: $250,000 with Some or All Persons excluded from PIP Coverage

This option is only available if you choose the $250,000 PIP medical limit.
• A named insured who wishes to exclude PIP medical must have *qualified health coverage that is not
Medicare.
• Any resident relative or spouse who wishes to exclude PIP medical must have qualified health coverage. Anyone who is excluded will have no PIP medical coverage. Anyone who is not excluded will have $250,000 in PIP medical coverage.

Requirements to be able to choose $250,000 with Exclusion:

• Every Individual must have Qualified Health Coverage.  Qualified Health Coverage is described as a health insurance policy that does not limit or exclude injuries from an automobile accident and that has an annual deductible of less than $6000

Risks:

• ANYONE YOU EXCLUDE WILL NOT HAVE PIP MEDICAL COVERAGE.

In addition:
• Persons relying on qualified health coverage to pay for auto accident injuries should be aware that, unlike auto insurance, health insurance stops paying when the policy ends or is canceled.
• If any excluded person loses qualified health coverage, you must notify your insurer within 30 days of loss of coverage.
• Within 30 days of losing qualified health coverage, if an excluded person is injured in an auto accident, coverage will be provided by the Michigan Assigned Claims Plan up to $2,000,000 if they have no other qualified health coverage or PIP medical coverage.
• A person who has not obtained qualified health coverage or PIP medical coverage within 30 days of the loss of coverage will not be entitled to any PIP medical benefits.

Benefits:

• You will pay a reduced premium because you will not be charged a premium for PIP medical
  coverage for anyone who is excluded.

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Option 5: Limited Coverage of $50,000 (Medicaid Option)

If you choose this limit, $50,000 is the most your auto insurance company will pay per person per accident for aninjured person’s expenses under PIP medical coverage.

Requirements to be able to choose Limited Coverage of $50,000:

• The applicant or named insured is enrolled in Medicaid; AND
  • Any spouse and all resident relatives have one of the following:
  a) qualified health coverage;
  b) Medicaid enrollment, or
  c) coverage under another auto policy with PIP medical coverage

Risks:

• Limited PIP medical coverages may not be enough to cover the cost of your medical care. If your PIP medical limit is reached, you may need to rely on other health coverage, which may not cover all medical, rehabilitation, or attendant care costs. If you do not have other health coverage, you may be personally responsible for paying these expenses.

Benefits:

• Lower coverage limits have less expensive premiums than plans with higher or unlimited PIP
  medical coverage.
• Up to the limit chosen, PIP medical will cover the cost of products and services that may not be
  covered by health insurance, such as rehabilitation and attendant care

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Option 6: No PIP medical coverage for anyone covered by this policy

If you choose this limit, $50,000 is the most your auto insurance company will pay per person per accident for aninjured person’s expenses under PIP medical coverage.

Requirements to be able to choose NO PIP MEDICAL:

• The applicant or named insured has coverage under both Medicare Parts A and B, AND
  • Any spouse and all resident relatives covered by the policy have qualified health coverage or are covered
  under another auto policy with PIP medical coverage.

Risks:

• NO PIP MEDICAL COVERAGE WILL BE PROVIDED UNDER YOUR POLICY  You and any other persons covered by this policy will not have PIP medical coverage. You and those persons may have to rely on other health coverage to pay for medical expenses resulting from an auto accident, which may not cover all products and services that PIP medical provides.
  • Persons relying on qualified health coverage to pay for auto accident injuries should be
  aware that, unlike auto insurance, health insurance stops paying when the policy ends or is
  canceled.
  • If anyone covered by the policy loses qualified health coverage, you must notify your
  insurer within 30 days of loss of the coverage.
  • Within the 30 days of losing qualified health coverage, if anyone covered by the policy is
  injured in an auto accident, coverage will be provided by the Michigan Assigned Claims
  Plan up to $2,000,000 if they have no other qualified health coverage or PIP medical
  coverage.
  • A person who has not obtained qualified health coverage or PIP medical coverage within
  30 days of the loss of coverage will not be entitled to any PIP medical benefits.

Benefits:

• You will pay a reduced premium because your policy will not be charged a premium for PIP medical
  coverage.