Michigan’s New No-Fault Law: What You Need to Know
Michigan Governor Gretchen Whitmer officially signed Michigan’s new No-Fault Law into legislation following widespread outcry shared by drivers around the state about the high prices of auto insurance.
Although the bill will bring about potential savings for drivers, parts of the bill could also potentially cloud up the claims process for injured drivers. Therefore, it may benefit you to reach out to an auto accident attorney following the roll-out of this new bill and learn in-depth about how it will affect you.
Personal Injury Protection Choices
After July 1st, 2020, drivers in Michigan will have the choice between three different No-Fault Personal Injury Protection (PIP) coverage levels: $250,000, $500,000, or “no limit.”
If the driver is enrolled in Medicaid, they can also choose from an additional coverage level of $50,000. These drivers could also choose to not maintain PIP coverage for new insurance policies issued or renewed after next July.
Medicaid Drivers who choose the $50,000 cap will receive 45% in savings. 35% of savings will be awarded to drivers covered in the $250,000 cap and 20% for drivers in the $500,000 cap. If drivers choose to maintain unlimited No-fault medical benefits following the policy implementation, they will save 10%.
However, these savings only relate to the PIP medical portion of your bill, not your entire monthly auto insurance bill. But, the PIP portion does account for up to 44% of your total bill, so you can still expect substantial savings.
Irrelevant Pricing Factors
As the new law is adopted, certain factors will no longer have an effect on pricing including gender, marital status, home ownership, the highest level of education, occupation, the driver’s postal zone, and credit score.
Increased Mini Tort Payouts
The new No-Fault law has increased the maximum limit for Mini Tort claims in Michigan from $1,000 to $3,000, effective immediately.
Higher Liability Limits
Now, drivers across Michigan must carry a liability bodily injury insurance with a minimum amount of $50,000 for one person and $100,000 for two or more people.
Suing for Excess Expenses
After the new PIP Choice levels come to fruition next July, car accident victims can sue for excess medical costs and personal expenses that were caused directly by their injuries sustained from the accident.
Expenses will be considered in the excess if they surpass the dollar amount of the driver’s chosen PIP cap amount.
Conditions for compensation
Effective immediately, Michigan requires car accident victims to satisfy a new definition of a “serious impairment of body function” to have the ability to sue for pain and suffering compensation. Quickly summarized, an acceptable impairment must be observable by another person separate to the injured person and significantly affect the victim’s abilities in day-to-day situations. Consult with your auto accident lawyer to find out if you qualify.
The current No-Fault law allows car accident victims, who have been denied or cut-off from benefits and have decided to sue for former unpaid and overdue benefits within one year from the initial accident.
Now, victims will be able to claim and collect benefits until the insurer formally denies or approves the claim. This process is already applicable and can be simplified with the help of a car accident attorney.
Although this new addition may not affect Michigan driver’s directly, an Anti-Fraud Unit will be created as soon as possible to investigate potentially criminal and fraudulent activities committed by the insurance market.
Dependent on the results of their investigations, drivers could benefit from further reductions on their monthly auto insurance bills.
Attendant care expenses
Starting next July, auto insurance companies are only required to pay up to 56 hours per week of in-home, family-provided attendant care, also known as nursing services.
This bill has brought forth many changes that affect everything from your monthly insurance bills to legal processes following an injury caused by a car crash. Cochran, Kroll & Associates, P.C. auto accident attorneys are available for questions about the new No-Fault Law in Michigan and what affects it could have on your livelihood.