On June 11, 2019, the State of Michigan enacted a vast amount of changes to its no-fault auto insurance law. Some of the changes were effective as of June 11, 2019; other changes will soon become effective. Here is what you should know:
Types of Insurance Coverage
Bodily Injury (BI) coverage pays for injury to (or death of) another person arising from an auto accident; it does not pay for your own injury or death. Personal Injury Protection (PIP) coverage, however, pays for your injury-related expenses including but not limited to hospital, medical, and funeral expenses (in some circumstances, your PIP coverage may extend to cover other people injured in the same or another auto accident). The recent legal reform includes changes to both PIP and BI coverage.
Changes in PIP Medical Coverage
Under the current law, there is only one PIP coverage option. The current law requires auto insurance policies to provide for unlimited, lifetime PIP medical coverage to pay for your (or another’s where covered) accident-related expenses if you are injured in an auto accident. For policies issued or renewed after July 1, 2020, however, there will be different coverage options to choose from.
PIP Medical Coverage Options
As noted, under the new law, an insurer is no longer required to provide unlimited, lifetime coverage. Rather, You will have to choose your level of PIP coverage. This is true for both individuals and businesses (commercial). Again, these changes apply to policies issued or renewed after July 1, 2020. You will have to choose from following six PIP coverage options:
- Unlimited coverage per person per accident
- Up to $500,000 in coverage
- Up to $250,000 in coverage
- Up to $250,000 in coverage with Pip medical exclusion(s) (under certain conditions)
- Up to $50,000 in coverage (under certain conditions)
- PIP opt-out (under certain conditions)
Changes to Insurer Order of Priority for PIP Benefit Claims
Prior to this legal reform, injured persons generally (there are “special” priority rules that are beyond the scope of this blog) claimed PIP benefits from the following insurers in the following order:
- Insurer of the Named Insured (i.e., your own policy); if none, then
- Insurer of a Spouse or Resident-Relative
If there was no insurance coverage through (1) or (2) above and the injured person was not an occupant of a motor vehicle (i.e., not a driver or passenger), the injured person claimed benefits through:
- Insurers of Owners or Registrants of motor vehicles involved in the accident; if none, then
- Insurers of Drivers of motor vehicles involved in the accident
If there was no insurance coverage through any of the above-listed options, an injured person could apply for PIP coverage through the Michigan Assigned Claims Plan (MACP). In this case, the injured person was still entitled to unlimited, lifetime PIP benefits.
With the legal reform, however, these rules have somewhat changed. For persons injured in auto accidents on or after June 11, 2019, the first general rule outlined above remains the same. That is, you always claim PIP benefits first from your own auto insurer; if none, then from the auto insurer of your spouse; if none then from the auto insurer of a resident relative.
If, however, (a) you do not have a personal auto policy and (b) there is no auto insurance otherwise available in your household (i.e., through a Spouse or Resident Relative), the rules for determining the insurer through which you claim PIP benefits are different. In this scenario (no personal or household auto insurance), injured persons (whether occupants or non-occupants of motor vehicles) are to claim PIP benefits from the MACP. Under the new law, claims covered by the MACP will capped at $250,000 as of July 2, 2020. Until then, all MACP cases must be treated like all other Michigan no-fault claims, where the amount of money is unlimited (no cap is imposed).
Changes to Bodily Injury (BI) / Property Damage (PD) Coverage Limits
The law limits the damages that can be claimed against you (or that you can claim against another) as the result of an automobile accident, except in certain situations. These damages are available where a person is found legally responsible for damages in these situations. The BI/PD portion of an automobile insurance policy will pay up to the BI/PD limit amounts detailed in the insurance policy. These amounts have been increased under the new law.
The new 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 may choose to purchase other BI/PD coverage limits. However, the lowest limits you may purchase are:
- Up to $50,000 for a person who is hurt or killed in an accident.
- Up to $100,000 for each accident if several people are hurt or killed.
- Up to $10,000 for property damage in another state.
The Payment of Benefits
Under the Michigan Insurance Code, you have important rights governing the payment of benefits from your auto insurance company. Under Michigan law, when your auto insurance company receives the receipt of a claim, it must do the following:
- Within 30 days, if the insurer believes that your claim (or a portion of it) is not supported by satisfactory proof, it must (a) notify you in writing of this fact and (b) specify what materials would constitute satisfactory proof of loss;
- Pay any part of your claim for which the auto insurance company has received satisfactory proof of loss for (via documentation) and pay the rest of your claim when the other reasonable supporting documentation is received.
PIP claims, such as claims for payment of medical bills, which provide “reasonable proof of the fact and of the amount of loss sustained” will be considered “overdue” if your auto insurance company does not pay them within 30 days of receipt. When this occurs your auto insurance company must then pay 12 percent simple interest (1% interest for each month overdue) on the total amount due. MCL 500.3142.
If you believe that your auto insurance company is unfairly denying or delaying your claim, you may file a complaint with the Department of Insurance and Financial Services (DIFS), which will review your complaint. You may also think about taking other legal action with respect to your claim.
The Michigan Personal Injury Attorneys at Miller & Tischler, P.C. Can Help
At Miller & Tischler, P.C., our team of knowledgeable and experienced Michigan personal injury attorneys can help.
If you or a loved one has been injured in a motor vehicle accident, it can have physical, emotional, and financial effects on you and your family. You should never have to pay for someone else’s mistakes. We always have our clients’ best interest at heart and will help to fight for the compensation that you deserve. To learn more or to schedule a free consultation, contact us today!