Michigan No-Fault Insurance Changes

In July 2021, the state of Michigan effected significant changes in Michigan no fault laws. As a no-fault state, motorists in Michigan have had to dig deep into their pockets for car insurance. Therefore, Michigan lawmakers passed these changes to ease the burden on auto insurance, based on policy research over the last few years.
It is critical for motorists to understand the new no-fault insurance law in Michigan so that they can choose the best coverage for their vehicles. While complex, understanding these changes will allow you a head-start in decision-making the next time you are negotiating your auto policy.

A Brief History of Michigan's No Fault Laws

No-fault laws aren't inherently bad. They are supposed to protect a motorist in the event of any car accident so that one gets proper medical attention regardless of the at-fault party.

However, as a result of this, all motorists in Michigan had to pay for unlimited personal injury protection (PIP) to allow an injured person to receive all necessary medical care for treatment, rehabilitation, and continuing homecare recovery, among others.

Limited PIP Coverage

This became very expensive; as a result, motorists could choose different PIP coverage levels for the first time from July 1, 2020. Under these initial Michigan no-fault law changes, you can select a coverage limit of $50,000 if you have Medicaid or choose between $250,000 and $500,000 if you do not have the Medicaid coverage.

The reason for this difference is, for Medicaid holders, your health insurance should cover your treatment and not your auto insurance. If you have Medicare, you can opt out of any PIP coverage, and anyone can still get unlimited PIP if they want.

Some Limitations of Limited PIP

Before choosing your limited PIP coverage, it is imperative that you understand how much health insurance you have. If you are not on Medicaid or Medicare, your health and car insurance provisions may run out, and yet you still need ongoing care.

Should this happen, you may have to limit your resources to qualify for Medicaid and remain that way to continue receiving the benefits. It goes without saying that if your financial resources exceed Medicaid provisions, you'll have to make alternate arrangements for your treatment.

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The 2021 Michigan No Fault Insurance Changes

Changes to the Home Care Laws

In July 2021, important changes regarding home healthcare came into effect. The latest Michigan no fault insurance changes provide only 56 hours a week of home-based care if this care is offered by a relative, friends, anyone living in the same house as the injured person, or even business associates.

Previously, the law allowed 24-hour coverage for anyone catastrophically injured after an auto accident. These changes don't apply to anyone getting attendant care from commercial agencies.

It is possible to challenge the limitations of this coverage through the family member or a lawyer representing the victim. Where medically necessary, insurance companies can cover more than 56 hours of home-based care. Ideally, care from family members or friends is cheaper than professional nursing care, so insurers may increase coverage if the situation demands it.

The Medicare Fee Schedule

Another aspect of the changing Michigan no fault insurance law relates to healthcare providers and their charges for services. The law has stipulated a new schedule, which offers a fraction of the Medicare payable amount.

This change aims to curb the practice of inflating medical bills for those with private health insurance, protecting all consumers and particularly those who need long-term care after an accident.

Third-Party Tort Lawsuit and Property Damage

If your accident coverage exceeds the provisions of your PIP medical benefits, you can sue the at-fault driver in a third-party tort lawsuit. If successful, the at-fault driver shall cover the present and future medical bills in excess of the victim's PIP coverage.

FAQs: New No-Fault Insurance Law in Michigan

  • Who pays for car damage in a no-fault state?
    The Michigan no fault insurance law only covers your medical bills. You must seek alternative avenues to receive compensation for property damage, such as car damage. Suppose you have separate comprehensive auto insurance or collision insurance. In that case, your insurer should fix your car or pay for repair or replacement according to the provisions of your policy.
  • Is Michigan no-fault insurance going away?
    No, the changes in Michigan no fault law do not mean the end of no-fault insurance. Instead, they reduce liability for insurance companies to reduce auto insurance premiums for Michigan motorists.
  • What is the new no-fault law in Michigan?

    The 2021 Michigan no fault insurance laws create more options for drivers who don't want unlimited Personal Injury Protection (PIP). They also introduce some limits to Home Care laws and Medicare charges for healthcare providers after an auto accident.

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