Frequently Asked Questions

To drive legally in Michigan, state law requires the purchase of auto no-fault 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.

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 medical expenses up to the limit of coverage you elect to purchase, as well as wage loss benefits and replacement service benefits. In addition, auto insurance provides coverage up to the coverage limit you select in the event that you’re held legally responsible for another person’s death, bodily injury, or damaged property in an accident.  In a serious accident, injuries and damage can amount to hundreds of thousands of dollars in costs to you. The financial security that results from being insured is one of the most important reasons to purchase insurance.

The 2019 auto insurance reform requires auto insurers to reduce statewide average PIP medical rates for 8 years. Under state law, the Michigan Department of Insurance and Financial Services (DIFS) reviews and approves every auto insurance rate filing before it is available for consumers to purchase. DIFS has engaged outside actuaries to review the filings to make sure that insurers are meeting or exceeding the mandatory statewide average rate reductions and not using prohibited rating factors.

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

Consumer protections added by auto no-fault reform include:

Elimination of Some Non-Driving Factors: The 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: A unit dedicated to investigating criminal and fraudulent activity related to the insurance and financial markets.

Michigan Catastrophic Claims Association (MCCA) Transparency: The MCCA is 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 be filed with and approved by DIFS prior to being offered to consumers.

Fines and Penalties: The 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)

PIP coverage is one of the mandatory auto no-fault coverages required in all Michigan auto policies, and pays allowable expenses for your medical care, recovery, rehabilitation if you are injured in an auto accident.

Michiganders have six PIP medical coverage options to choose from. These options, or levels, represent the most your auto insurer will pay per person per accident for the medical portion of PIP coverage. The amount you choose will affect this portion of your premium.

When purchasing a new policy or renewing an existing one, you must choose a level of PIP medical coverage. Some options (1, 2, and 3) are available to all drivers, while others (4, 5, and 6) are only available to those who have the required health insurance coverage.

The PIP medical coverage options are:

1. Option 1: Unlimited coverage
2. Option 2: $500,000 per person per accident
3. Option 3: $250,000 per person per accident
4. Option 4: $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 (QHC) that is not Medicare; AND
• Any resident relative or spouse who is excluding PIP medical has QHC.
5. Option 5: $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 QHC, are enrolled in Medicaid, or are covered under another auto policy with PIP medical coverage.
6. Option 6: 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 QHC 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 opt out of or exclude PIP medical coverage.

If you don’t make a PIP medical coverage selection, fail to provide the required documentation, or choose an option you do not qualify for, your policy will be issued with the default PIP medical coverage level and you will be charged the associated premium.

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.

PPI is one of the mandatory coverages required in all Michigan auto policies. It 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.

BI/PD liability coverage is one of the mandatory coverages required in all Michigan auto policies and provides coverage if you are held legally responsible for another person’s death, bodily injury, or damaged property in an auto accident. This includes compensation for death or serious injury, pain and suffering, medical care in excess of the injured party’s policy limits, and/or involvement in a car accident outside of Michigan or with an out-of-state driver.

When purchasing a new policy or renewing an existing one, you can choose the limit of BI/PD coverage you want to carry. This limit represents the most an insurer will pay per person/per accident. If you do not make a selection, your policy will carry the default coverage limit. 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 do not make a selection, you will automatically have the default BI/PD coverage limits, which 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.

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.

If you are responsible for injuries or physical damages, the costs can exceed the BI/PD liability limit of your policy and 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 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, completed and returned, with any applicable proof of health insurance coverage to make an effective coverage selection. If you do not make a selection, fail to provide the required documentation, or choose an option you do not qualify for, your policy will be issued with the default PIP medical coverage level, and you will be charged the associated premium.

Sample PIP Medical Coverage Form

Sample Bodily Injury Liability Coverage Form

That depends on the coverage choice you make. Everyone will be offered the PIP form when purchasing a new policy or renewing an existing one.  You should only have to fill out a new form if you are making a change to your coverage or if you choose a PIP option that requires you to provide proof of health coverage. 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. 

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 will 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 per person, per accident and you may be personally responsible for any bills that exceed that $250,000 in coverage.

Medically necessary attendant care is covered under your auto insurance policy up to the PIP medical coverage limit you choose. Note that 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. The insurer must still cover all medically necessary care up to your PIP medical coverage limit, and may contract with a relative of the injured person or a professional care provider for a period exceeding 56 hours.

The Michigan Court of Appeals ruled that this limitation does not apply to treatment rendered to people injured in accidents before June 11, 2019.

Additionally, insurers must offer a rider that will provide coverage for attendant care over 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).

QHC means either Medicare Parts A & B (this could also be a Medicare Advantage plan or Medigap) or a health insurance policy that doesn’t limit or exclude auto accident injuries and has a deductible that is less a certain amount, set by state law. For July 1, 2026 to June 30, 2027, that amount is $6,579 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 health insurance company to get this documentation before you make a certification to your auto insurance company that you have QHC. 

For additional information, please see Sample Qualified Health Coverage Letter.

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).

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 on 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 and you would be personally responsible for any medical bills.

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. A QHC letter will be required if you choose an option that requires proof of health coverage for yourself or a family member (Options 6, 5 or, 4). 
I have an indemnity plan (e.g., accident-only indemnity plans, fixed indemnity plans, and hospital indemnity). Can I opt out or exclude Personal Injury Protection (PIP) medical coverage? 

No. 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 (this could also be a Medicare Advantage plan or Medigap) or a health insurance policy that does not limit or exclude auto accident injuries and has a deductible that meets the current limit set by state law.

Medicare will pay for Medicare-covered services to enrollees who opt out of PIP medical benefits, are injured in an automobile accident, and have no other available coverage. You may be responsible for out-of-pocket costs subject to your Medicare coverage.

PIP coverage pays for services that are typically not included in a Medicare policy, such as attendant care, transportation to and from medical appointments, vehicle modifications, case management services, residential treatment programs, long-term and custodial care, and replacement services.

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.

To opt out of PIP medical coverage (Option 6) both of the following must be met:

1. The applicant/named insured is enrolled in Medicare Parts A and B.
   
   - Note: Because Medicare Advantage (Part C) and Medicare Supplement Plans (Medigap) include Medicare Parts A and B, they can also be used to opt out.
   
   

   AND
   
   

2. Any spouse and all resident relatives either carry Medicare Parts A and B, other Qualifying Health Coverage (QHC) or PIP medical coverage from a separate auto policy.

   Common opt out scenarios include:

• A single senior with no resident relatives who carries Medicare Parts A and B.
• A married couple who both carry Medicare Parts A and B.
• A married couple where the applicant/named insured carries Medicare Parts A and B, and the spouse carries QHC or PIP coverage via a separate auto policy.
• A single or married couple with children where the applicant/named insured carries Medicare Parts A and B and all other household members carry QHC or PIP coverage via a separate auto policy.

You cannot opt out of PIP medical if:

• The applicant/named insured is NOT enrolled in both Medicare Parts A and B.
• One or more resident relatives have medical coverage that is NOT QHC and do not carry a separate auto policy.
• One or more resident relative carries Medicaid coverage.

For any questions regarding whether you qualify to opt out of PIP medical coverage you may consider speaking to your licensed insurance agent or contacting DIFS Monday through Friday from 8 a.m. to 5 p.m. at 833-ASK-DIFS (833-275-3437).

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 and B. 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. 

While many people have Medicare benefits for life, some do not. Reasons someone 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.

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). You must also provide proof of QHC for all household members you want to exclude from PIP medical coverage. Your policy will be issued with no PIP medical coverage for excluded household members with submitted proof of QHC.

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. 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.

For more information, please see Bulletin 2023-17-INS.

The PIP opt out and PIP exclusion options apply to the medical portion of PIP only. Wage loss, survivor’s loss benefits, replacement services, and some funeral and burial expenses are still included in your policy and your insurance company may charge you a premium for these PIP benefits.

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

The Michigan Department of Insurance and Financial Services (DIFS) has confirmed with the U.S. Department of Defense that TRICARE and CHAMPVA coverage are QHC under Michigan’s 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 2023-17-INS for more information.

A current Medicaid card can be used to show proof of your Medicaid enrollment to your auto insurance agent or auto insurance company.

Please see Medicaid ID Card Guide for more information.

Yes. In accordance with MCL 500.3107d(7)(b)(i)(B) of the Michigan Insurance Code, the Director is required to adjust the maximum QHC deductible annually according to the year's medical portion of the Consumer Price Index. However, if the total change does not exceed $500 or more, then the deductible maximum remains the same until the following year’s calculation.

For the current maximum, please see the PIP medical coverage selection form or contact DIFS Monday through Friday from 8 a.m. to 5 p.m. at 833-ASK-DIFS (833-275-3437).

If a motorcyclist is injured in an accident involving a motor vehicle, the motorcyclist may be entitled to receive Personal Injury Protection (PIP) medical benefits, depending on the specific circumstances of the crash.

In most cases, PIP benefits are paid by the insurer of the owner or registrant of the motor vehicle involved in the crash. The available PIP benefits are subject to the coverage limits selected under that auto insurance policy.

If a motor vehicle involved in the crash is uninsured and no applicable insurer can be identified, the injured motorcyclist may apply for benefits through the Michigan Assigned Claims Plan (MACP). For medical care, there is a $250,000 cap on benefits paid through the MACP, which includes items like hospital bills, doctor visits, rehabilitation, wage loss, and replacement services.

If a motorcycle crash does not involve a motor vehicle (for example, if the motorcycle crashes into a tree in a single-vehicle crash), PIP benefits may not be available.

Motorcyclists should speak to their insurance agent or company to understand their insurance coverage in the event of a crash.

Under mini-tort, if you are 50% or more at fault in an accident, you can be sued for up to $3,000 in damages you caused to the other vehicle that are not otherwise covered by insurance. Drivers carrying optional collision coverage for damages to their vehicle can only recover their deductible (the portion of damage not covered) via mini-tort, whereas those who do not carry collision may recover the entire $3,000.

Limited property damage coverage is an optional liability coverage that protects you from any amount you become responsible for via mini-tort.

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 the Michigan Department of Insurance and Financial Services (DIFS) for review. Under state 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.

You are not required to take any action, but if you have questions, please contact DIFS at 833-ASK-DIFS (833-275-3437) or AutoInsurance@michigan.gov.

The Michigan Catastrophic Claims Association (MCCA) is a non-profit association created by legislation that reimburses auto insurance companies for PIP medical claims which meet or exceed an identified amount. Each year, the MCCA Board of Directors analyzes how much is needed to cover anticipated claims, identifies any deficits in reimbursing past/current claims, and assesses a per-vehicle fee for both anticipated claims and any current deficits accordingly.

If you choose to carry unlimited PIP coverage you will be charged the assessment for both anticipated claims and any current deficits. If you select an option providing less than unlimited PIP coverage, you will only be assessed a deficit fee.

Motorcycle insurance companies are assessed by the MCCA just like auto insurance companies. While motorcycle policies do not include Personal Injury Protection (PIP) medical 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.

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 Michigan.gov/DIFScomplaints.

Under state law, some auto insurers may offer auto insurance premium discounts to consumers who choose to coordinate their auto and health insurance benefits. This means that your health insurer would agree to pay first for your medical care in the event of an auto accident, which would result in a discount on your auto insurance premium.

Your auto insurer is permitted to ask you for a coordination of benefits letter to obtain this discount. This letter would be provided by your health insurer.  It is important to note that the terms of your health insurance policy may not permit coordination of benefits with your auto insurance, and if so, your health insurer may not provide the requested letter. A coordination of benefits letter is not required for you to be able to obtain auto insurance coverage.

Consumers with questions about coordinating benefits should contact their insurer or agent to learn more.

Coordination of benefits is when your health insurer agrees to be the first insurer to cover your medical care in the event of an auto accident.

QHC is health insurance that meets the requirements under Michigan law to opt out of or exclude PIP medical from your auto insurance policy. See “What is Qualified Health Coverage (QHC) and how will I know if I have it?” for more information.