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Frequently Asked Questions

Information on Purchasing Auto Insurance

On May 30, 2019, Governor Whitmer signed historic bipartisan no-fault auto insurance reform legislation (Public Acts 21 and 22 of 2019) to provide insurance coverage options, lower rates for Michigan drivers while maintaining the highest benefits in the country, and strengthen consumer protections.

This FAQ will be updated to provide the latest information to Michigan drivers.  Please check back often for updates.

Notice: The information contained within this website pertains to the new auto insurance law. These changes will apply to policies issued or renewed after July 1, 2020.

 

  • The new law applies to auto insurance policies issued or renewed after July 1, 2020.

    If you are already receiving benefits from your auto insurance policy due to injuries from an auto accident prior to the new law’s effective date, you will continue to receive those benefits regardless of the choice you make.

  • Michigan had the highest auto insurance benefits, but also had the highest costs. Mandatory unlimited Personal Injury Protection (PIP) medical benefits proved too expensive for many Michigan families. Some drivers who could not afford costly unlimited coverage were driving uninsured. Drivers will now have a choice to reduce their premiums for the medical portion of PIP by relying on their own health insurance for their medical bills.

    Michigan’s new law lowers premiums while still offering you a choice of coverage options including unlimited lifetime PIP medical benefits.

  • To drive legally in Michigan, state law requires the purchase of no-fault automobile insurance. Driving without insurance is punishable as a misdemeanor with a fine of up to $500 and up to one year in jail. The court may also order your license suspended for 30 days or until you are able to provide proof of valid insurance.

    Additionally, purchasing auto insurance provides financial security. If you or your family are injured in an auto accident, your auto insurance will pay all reasonably necessary expenses up to the limit of coverage you elect to purchase, as well as wage loss benefits and replacement service benefits. In a serious accident, injuries can amount to hundreds of thousands of dollars in cost to you. The financial security that results from being insured is one of the most important reasons to purchase insurance.

  • The new law implemented the following cost reduction measures:

    Personal Injury Protection (PIP) Choice: You will now be able to choose a coverage level that is appropriate based on your needs and budget.

    Rate Reduction: Each insurance company will be required to reduce PIP statewide average medical premiums. Your premium will depend on your individual circumstances and the coverage you select.

    Fee Schedule: A required cost control measure between auto insurance companies and health care providers to make PIP medical coverage more affordable for you.

  • The new law established the following consumer protections:

    Elimination of Some Non-Driving Factors: The new law prohibits auto insurance companies from using sex, marital status, home ownership, credit score, educational level, occupation, and zip codes in setting your auto insurance rates.

    Fraud Investigation Unit: The newly established unit investigates criminal and fraudulent activity related to the insurance and financial markets.

    Michigan Catastrophic Claims Association (MCCA) Transparency: The MCCA is now required to provide an annual report to the Legislature, post an annual consumer statement on their website, and is subject to an audit by the Michigan Department of Insurance and Financial Services (DIFS) every three years.

    Prior Approval: Auto insurance rates and policies must now be filed with and approved by DIFS prior to being offered to consumers.

    Fines and Penalties: The new law allows for increased fines for insurance companies, agencies, and licensed agents for certain violations of the law.

  • Below are the three basic coverages in a Michigan auto insurance policy that must be purchased and carried on every vehicle.

    Personal Injury Protection (PIP)
    Property Protection (PPI)
    Residual Bodily Injury and Property Damage Liability (BI/PD)

  • For policies issued or renewed after July 1, 2020, if you are hurt in an auto accident, PIP will pay all reasonable and necessary medical expenses for your lifetime up to the maximum coverage amount selected in the affected policy. PIP will also pay wage loss and replacement services for up to three years after the date of the accident.

    The new law allows you to choose your PIP medical limit on your auto policy. PIP medical coverage pays for allowable expenses for medical care, recovery, and rehabilitation if you have injuries from an auto accident.

    The PIP medical coverage options are:

    • Unlimited coverage

    • $500,000 per person per accident

    • $250,000 per person per accident

    • $250,000 per person per accident with exclusions
      To select this option, one or both of the following must be met:

      • The named insured who is excluding PIP medical has qualified health coverage that is not Medicare; AND

      • Any resident relative or spouse who is excluding PIP medical has qualified health coverage

    • $50,000 per person per accident
      To select this option, both of the following must be met:

      • The applicant or named insured is enrolled in Medicaid; AND

      • Any spouse and all resident relatives have qualified health coverage, are enrolled in Medicaid, or are covered under another auto policy with PIP medical coverage.

    • No PIP medical coverage
      To select this option, both of the following must be met:

      • The applicant or named insured has coverage under both Medicare Parts A and B; AND

      • Any spouse and all resident relatives have qualified health coverage or are covered under another auto policy with PIP medical coverage.

    PIP coverages that are separate from PIP medical coverage such as wage loss, replacement services, and funeral and burial expenses are still included in your auto policy, even if you choose no PIP medical coverage (opt out) or the $250,000 per person per accident with exclusions options.

    If you don’t make a PIP medical coverage selection, your policy will be issued with unlimited PIP medical coverage and you will be charged the appropriate premium for this coverage.

  • PPI pays up to $1 million for damage your car does in Michigan to other people's property, such as buildings and fences. It will also pay for damage your car does to another person’s properly parked vehicle. It does not pay for any other damage to cars.

  • Michigan’s no-fault insurance protects insured persons from being sued as the result of an automobile accident, except in certain situations. This includes when the injured party does not have enough coverage to pay for treatment or payment must be made to compensate someone that was killed or seriously injured. This portion of your automobile insurance policy will pay up to your coverage limit amounts if you are found legally responsible for damages in these situations.

    For policies issued before July 2, 2020, BI/PD minimum coverage limits are:

    • Up to $20,000 for a person who is hurt or killed in an accident.

    • Up to $40,000 for each accident if several people are hurt or killed.

    • Up to $10,000 for property damage in another state.

    Under the new law, the default BI/PD coverage limits are:

    • Up to $250,000 for a person who is hurt or killed in an accident.

    • Up to $500,000 for each accident if several people are hurt or killed.

    • Up to $10,000 for property damage in another state.

    You have the option of purchasing other BI/PD coverage limits under the new law. The lowest coverage limits you may purchase are:

    • $50,000 for a person who is hurt or killed in an accident.

    • $100,000 for each accident if several people are hurt or killed.

    • $10,000 for property damage in another state.

    It is very important to carefully consider the coverage limits you choose to purchase as the choice you make will have financial consequences. 

    If you are responsible for injuries to another person. you may be liable for damages for their pain and suffering, as well as the costs of their medical and other care that exceed their coverage under their auto insurance policy. The bodily injury liability limit of your policy will pay for such damages, but only up to the amount of the limit you choose. You will be required to pay any amount over the limit you choose.  This amount could be substantial and may lead to severe financial consequences, such as:

    • Your assets may be seized, or a lien may be placed on your home;

    • Your wages may be garnished; or

    • Your driver’s license may be suspended.

    You may consider speaking with your insurance agent and/or consulting legal and financial advisors about the options available to you.

  • You will select your new PIP and BI coverage limits by filling out paper or electronic forms provided to you by your insurance agent or company. These forms must be signed and completed and returned to your insurance agent or company to make an effective coverage selection. If you do not make an effective PIP coverage selection on the PIP medical coverage form for a new policy or your first renewal after July 1, your policy will default to unlimited PIP medical coverage. 

    Sample PIP Medical Coverage Form

    Sample Bodily Injury Liability Coverage Form

  • Some drivers choose to purchase additional coverages or purchase higher coverage limits. These additional coverages and limits are not required to drive legally in Michigan and should be purchased based on your own needs and circumstances. The new law made changes to “Mini-Tort” and created an attendant care rider. Both coverages are non-mandatory coverages.

    Limited Property Damage Liability Insurance ("Mini-Tort")

    Under the new law, if you are 50% or more at fault in an accident, you can be sued for up to $3,000 (previously $1,000) in damages to cover the cost of the other driver’s deductible or for actual damages to a car not covered by collision. Many consumers purchase this additional liability coverage to protect themselves from this specific liability.

    To comply with the changes in the new law, if you have purchased Mini-Tort coverage your insurance company will provide you with coverage of up to $3,000.00 on a mini-tort claim for any accident occurring after July 1, 2020. This coverage amount will apply regardless of the date your insurance policy was issued or any conflicting policy language.

    Attendant Care Rider

    Attendant care, which includes services to assist an injured person with tasks they would normally do for themselves (e.g., eating, bathing, dressing, grooming, and medication administration), is already included in Personal Injury Protection (PIP) coverage. Insurers are required to offer an additional optional rider for attendant care coverage in excess of the amount provided by the chosen PIP option if you choose a PIP limit of $50,000 (Option 5), $250,000 (Option 3), or $500,000 (Option 2).

    You may consider consulting with a licensed insurance agent or company to discuss all optional coverages available to you.

  • The Michigan Catastrophic Claims Association (MCCA) is a private non-profit association that provides reinsurance for all auto insurers who operate in Michigan. The MCCA is responsible for reimbursing insurers for Personal Injury Protection (PIP) claims that exceed a certain amount. That amount is currently $580,000.

    In November 2019, the MCCA announced that if you select the unlimited PIP option the assessment charged per vehicle will be $100 for the period beginning July 2, 2020 through June 30, 2021. If you select an option providing less than unlimited PIP coverage, there will be no MCCA assessment for the period beginning July 2, 2020 through June 30, 2021.

  • If you are having a problem with your auto insurance, the Michigan Department of Insurance and Financial Services (DIFS) is here to help. Please contact DIFS Monday through Friday from 8 a.m. to 5 p.m. at 833-ASK-DIFS (833-275-3437) to ask questions or to file a written complaint against the company, agent, or agency. You may also file a complaint online by visiting www.michigan.gov/DIFScomplaints.

  • Yes.

  • Yes. Medicare Advantage plans cover all Medicare services that are covered under Part A and Part B.

  • Your current policy, written before July 1, 2020, will continue until your next renewal unless you do something to make a change. You may want to contact your insurance agent or insurance company and ask for a quote under the new law so you can make an informed decision on any changes you wish to make. We encourage drivers to shop around with other companies to ensure they have the best rate.

  • In the past, Medicare would not pay for auto accident injuries in Michigan. This is because everybody in Michigan had lifetime unlimited benefits, and Medicare always pays last, so it never had to pay. Under the new law, a person with Medicare Parts A & B or Part C (Medicare Advantage) can choose to opt out of PIP medical coverage and rely on Medicare coverage for auto accident injuries. DIFS has confirmed with the federal government that, as long as a person has opted out of PIP medical coverage, Medicare will pay for auto accident injuries.

    It is important to note that having Medicare does not mean you have to opt out of PIP medical coverage. You can still purchase the level of PIP medical coverage you choose. If you choose to purchase PIP medical, your PIP medical will serve as primary payer for your medical costs after an auto accident up to the coverage limit you’ve selected. After that, your Medicare coverage will pay, subject to the limitations of the Medicare coverage.

  • Generally speaking, QHC ensures auto accident injuries will be covered. Having QHC means either Medicare Parts A & B (this could also be a Medicare Advantage plan) or a health insurance policy that doesn’t limit or exclude auto accident injuries and has a deductible of $6,000 or less.

    Your health insurer should provide you with a document that tells you if your policy is considered QHC. You may have to contact your employer’s benefit office or insurance company to get this documentation before you make a certification to your auto insurance company that you have QHC.

    If you believe you have QHC and are unable to obtain a letter from your health insurer or employer, please contact DIFS Monday through Friday from 8 a.m. to 5 p.m. at 833-ASK-DIFS (833-275-3437).

    Sample Qualified Health Coverage Letter

  • Yes, your care will still be covered. Your coverage for this accident continues under the terms of your policy at the time of the accident and will continue regardless of any future PIP medical option.

  • As was the case prior to the new changes to the law, if a motorcyclist is injured in an accident involving a motor vehicle, the motorcyclist is entitled to receive PIP medical benefits from the insurer of the owner of the motor vehicle. If the owner of the motor vehicle has no coverage on the motor vehicle, then the motorcyclist could seek PIP medical benefits from the driver of the motor vehicle, the motor vehicle insurer of the operator of the motorcycle, or the motor vehicle insurer of the owner of the motorcycle--in that order of priority. The motorcyclist would be limited to the PIP coverage amount in the applicable policy. If no coverage exists, the motorcyclist is entitled to up to $250,000 of medical benefits if needed under the Michigan Assigned Claims Plan (MACP). If the motorcyclist has excess medical bills over the applicable PIP coverage limit, the motorcyclist could look to their own health insurance or sue an at-fault driver, depending on their situation.

  • The Michigan Catastrophic Claims Association (MCCA) is a private non-profit association that provides reinsurance for all auto insurers who operate in Michigan. The MCCA is responsible for reimbursing insurers for Personal Injury Protection (PIP) claims that exceed a certain amount. That amount is currently $580,000.

    Motorcycle insurance companies are assessed by the MCCA just like auto insurance companies. While motorcycle policies do not include Personal Injury Protection (PIP) benefits, motorcyclists are still entitled to PIP medical benefits if they are injured in an accident involving a motor vehicle. Therefore, motorcycle insurers are required to pay an assessment to the MCCA for all motorcycles they insure, which is typically passed on to the motorcycle policyholder.

  • The new law requires that the Michigan Department of Insurance and Financial Services (DIFS) review and approve every rate filing before it is available for consumers to purchase. For the first time, DIFS has engaged outside actuaries to review the filings to make sure that insurers are meeting or exceeding the new rate reduction requirements and not using prohibited rating factors. All rate filings for the effective date of July 2 have been reviewed, and DIFS announced statewide average rate reductions exceed the requirements in the law for every coverage option.

    It is important to remember that your specific rate will depend on your personal circumstances, such as your driving record and the level of coverage chosen, so it is important to shop around to get the best price.

  • The law has changed in that regard. Previously, auto insurance companies could charge a penalty to people who had gone without auto insurance for a period of time. Under the new law, insurers cannot limit coverage, charge a reinstatement fee, or increase the premium for an eligible driver solely due to a lapse in coverage if the driver applies for insurance until January 1, 2022.

  • Under the new law, no one has to purchase unlimited PIP medical on their auto policy, though Michigan remains the only state where that is still an option. People who buy lower PIP medical coverage levels or who opt out entirely would rely on their health insurance coverage to pay for any auto accident injuries. It is important to know that if you choose a lower level of PIP medical coverage and you don’t have health insurance, you may be personally responsible for your medical costs that exceed your PIP medical coverage limit if you are injured in a crash.

  • That depends on the coverage choice you make. Everyone will be offered the PIP form when they renew or start a new auto insurance policy after July 1, 2020. After that, you should only have to fill out a new form if you are making a change to your coverage or if you previously opted out, excluded someone in your household from PIP medical coverage, or selected the $50,000 PIP medical option. This is done to ensure you have not had a change in health insurance that could result in you no longer being eligible for those options. Some insurers may require you to complete the PIP form more often, and you should contact your insurer or agent to learn more.

    If you choose a PIP option that requires you to provide proof of health coverage, you will be required to provide that proof at every renewal.

  • Choosing a lower level of PIP medical coverage would not affect what products, services, and accommodations are covered if you are injured in a car crash. However, there would be a dollar limit on the medical bills your insurance company will pay. For example, if you choose $250,000 in coverage, that is the maximum amount your auto insurance company will pay and you may be personally responsible for any bills that exceed that $250,000 in coverage.

  • Beginning after July 1, 2021, insurers are only required to pay for 56 hours per week of in-home attendant care provided by someone who is related to the injured person, domiciled in the household of the injured person, or with whom the injured person had a business or social relationship before the injury. An insurer may contract to pay benefits for necessary in-home care that exceeds that 56 hour cap. The insurer may choose to contract with a relative of the injured person or a professional care provider for the period exceeding 56 hours.

    Additionally, insurers are required to offer a rider that will provide coverage for attendant care in excess of an insured’s PIP limit. This rider must be offered to anyone choosing a policy with PIP medical limits ($50,000, $250,000, or $500,000).

  • If you decide to rely on qualified health coverage to pay for auto accident injuries, you should be aware that, unlike auto insurance, health insurance stops paying when the policy ends or is canceled. If you exclude or opt out of PIP medical coverage from your auto insurance policy and lose qualified health coverage, you must notify your auto insurer and obtain qualified health coverage or PIP medical coverage within 30 days. If you are injured during that time in an auto accident, coverage will be provided by the Michigan Assigned Claims Plan up to $2 million if you have no other qualified health coverage or PIP medical coverage. After 30 days, if you have not obtained qualified health coverage or PIP medical coverage, you will not be entitled to any PIP medical benefits in the event of an auto accident.

  • If you are hurt in an accident, Personal Injury Protection (PIP) benefits will pay for all reasonable and necessary medical expenses for your lifetime up to the maximum coverage amount selected in the affected policy and will also pay wage loss, survivor’s loss benefits, and replacement services for up to three years after the date of the accident. The PIP opt out and PIP exclusion options apply to the medical portion of PIP only. Wage loss, survivor’s loss benefits, and replacement services are still included in your policy and your insurance company may charge you a premium for these PIP benefits.

    If you are concerned your auto insurance company is charging you the wrong premium, DIFS encourages you to first attempt to resolve your complaint directly with your agent or auto insurance company. If you are still dissatisfied, please contact DIFS Monday through Friday from 8 a.m. to 5 p.m. at 833-ASK-DIFS (833-275-3437) to ask questions or to file a written complaint against the company, agent, or agency.

  • The U.S. Department of Veterans Affairs has determined that VA coverage is not Qualified Health Coverage (QHC) under Michigan’s new auto insurance law, so consumers may not use VA coverage to exclude or opt out of PIP medical coverage.

    DIFS has confirmed with the U.S. Department of Defense that TRICARE and CHAMPVA coverage is QHC under Michigan’s new auto insurance law. Consumers may use TRICARE or CHAMPVA to exclude or opt out of PIP medical coverage. TRICARE or CHAMPVA should provide you with a document that tells you your policy is considered QHC. You may have to contact TRICARE or CHAMPVA to get this documentation before you make a certification to your auto insurance company that you have QHC.

    Please see Bulletin 2020-47-INS for more information.

  • No. Accident-only indemnity plans, fixed indemnity plans, and hospital indemnity plans are not considered Qualified Health Coverage (QHC) for the purposes of excluding or opting out of PIP medical coverage.

    Having QHC means either Medicare Parts A & B or a health insurance policy that does not limit or exclude auto accident injuries and has a deductible of $6,000 or less.

  • A current Medicaid card can be used to show proof of your Medicaid enrollment to your auto insurance agent or auto insurance company. The guide below provides a sample list of Medicaid cards that can be used to show proof of enrollment.

    Medicaid ID Card Guide

  • No. A QHC letter is not required by your insurance agent or insurance company to provide you with an auto insurance quote for any of the Personal Injury Protection (PIP) medical coverage options. You will need to provide a QHC letter if either of the following apply: 

    • You are applying for new PIP medical coverage that requires you to have QHC, OR;
    • You are renewing your PIP medical coverage that requires you to have QHC.

    Your health insurer should provide you with a document that tells you if your policy is considered QHC. You may have to contact your employer’s benefit office or health insurance company to get this documentation before you make a certification to your auto insurance company that you have QHC.

    Sample Qualified Health Coverage Letter

  • No. For the period of July 1, 2021 through June 30, 2022, the maximum deductible for determining whether health or accident coverage is QHC remains $6,000.

    Please see Bulletin 2021-05-INS for more information.

  • As part of Michigan’s new auto no-fault insurance law, health care providers may file an appeal with DIFS when an auto insurer has made a determination that care they have provided to an auto accident victim has been overutilized or that the cost charged for the care was inappropriate. If you have received a notice related to Utilization Review, it means that your health care provider has disagreed with a decision made by your auto insurer and that the provider has submitted an appeal to DIFS for review. You’re not required to take action but, if you have questions, please contact DIFS at 833-ASK-DIFS (833-275-3437) or autoinsurance@michigan.gov.

  • If you choose to rely on Medicare coverage to pay for auto accident injuries, your auto insurance company or agent cannot confirm your eligibility for the exclusion or opt out options without proof of Medicare parts A & B. While many people have Medicare benefits for life, some do not. Reasons somebody may lose Medicare coverage may include failing to pay plan premiums, no longer qualifying due to loss of a qualifying disability, or engaging in Medicare fraud. Submitting documentation regarding your Medicare coverage at every renewal makes sure that your insurance company or agent can verify and document your eligibility and ensures you have coverage if you are injured in an accident.

  • If you want to exclude PIP medical coverage from your policy when applying for new coverage or renewing your policy, you must submit a completed PIP selection form choosing $250,000 in PIP medical coverage with some or all household members excluded from PIP medical (Option 4) and provide proof of QHC for all household members you want to exclude from PIP medical coverage.

    If you do not provide proof of QHC for any household members, your policy will be issued with $250,000 in PIP medical coverage for those individuals and you will be charged the appropriate premium for that coverage. Your policy will be issued with no PIP medical coverage for excluded household members with submitted proof of QHC.

    For example, if you want to exclude a household of five from PIP medical coverage, but only submit proof of QHC for one person, your policy will be issued with no PIP medical coverage for that individual, and $250,000 in PIP medical coverage for the four household members without proof of QHC.

The answers provided are not meant to be a substitute for legal advice.