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What the no-fault auto reform deal means for Michigan drivers

Sydnie Weller - Monday, June 10, 2019

Michigan Governor Gretchen Whitmer signed a bill into law designed to lower insurance premiums on May 30, 2019. The bill revises No-Fault auto insurance. It will no longer be required to purchase unlimited medical coverage with your auto policy. Michiganders now have a say in how much coverage they purchase.

For the past 46 years, Michigan residents have been required by law to purchase unlimited No-Fault auto insurance regarding personal injury protection (PIP). Under the no-fault system, medical expenses are covered 100% by the insurance company for injuries caused by auto accidents. This is an expensive coverage that increases the premium. Michigan Auto Insurance Reform, Explained written by Aaron Mondry explains the no-fault system has caused Michigan to have the highest auto premiums in the country. Michigan’s average annual rate is almost double the national average.

Michigan Auto Law breaks the bill down and goes into detail about the savings individuals will see in their premiums. Insureds will be able to choose how much coverage they have for their PIP. Coverage options will range from a state minimum to unlimited medical coverage. The less coverage an insured chooses, the lower their premium will be. The reform does not guarantee lower premiums for all insurance policies; insureds will only see savings in the No-Fault PIP portion of their policy.

The bill is set to go into effect in July 2020. Michigan Auto Law also explains insureds will be required to pay into the catastrophic fund—individuals catastrophically injured before the effective date will continue to receive benefits. Those injured after July 2020 will need to rely on their health insurance to cover auto accident injuries.

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