Michigan’s no-fault auto insurance reforms gave drivers something they never had before: a choice in how much PIP medical coverage to carry. For some families, that choice suggested an opportunity to lower the cost of auto insurance.
It is vitally important that Michigan drivers understand the importance of selecting unlimited PIP coverage, why unlimited coverage remains important and essential, and what they drivers give up when they select lower PIP medical limits.
What Changed Under Michigan’s PIP Choice System?
Before Michigan’s 2019 no-fault reforms, auto insurers provided drivers with unlimited PIP medical benefits as part of their auto insurance. The reforms changed that system by allowing drivers to select different levels of PIP medical coverage.
The appeal of PIP choice is understandable for the simple reason that with it comes a “promise” of reduced premiums. Drivers can consider their budgets, existing health coverage, and other circumstances when deciding how much coverage they want to purchase. What Michigan consumers don’t understand until it’s too late, however, is the limited coverage that these lower PIP limits provide and how it may impact one’s ability to receive all the reasonably necessary products, services, and accommodations that assist in one’s care, recovery and rehabilitation from significant injuries sustained in a car accident.
What Do You Give Up for a Lower PIP Premium?
Choosing a lower PIP medical limit does not simply change what you pay for insurance. It changes how much your auto insurer may be responsible for paying toward covered accident-related medical expenses.
If you choose a limited amount of PIP medical coverage, your insurer’s obligation for those expenses is generally capped at the amount selected, unless you purchase excess attendant care coverage. Once those benefits are exhausted, the PIP coverage under your auto insurance policy ceases paying for any further medical care, no matter how much you need it.
In other words, part of the financial risk that was once addressed through unlimited PIP medical benefits is now being placed back on drivers who select limited coverage, which is why any premium savings should be considered in context. A driver can see exactly how much a lower PIP option reduces an insurance bill. What cannot be seen at that moment is what an accident might eventually cost.
Some drivers may assume their health insurance will simply take over if PIP benefits run out. Health coverage can certainly be important, but it may come with deductibles, copays, provider networks, coverage restrictions, and other requirements. Certain accident-related services available through PIP may not be covered at all or in the same way by a health plan.
There may also be situations in which an injured person can pursue compensation from an at-fault driver. But a car accident claim against an at-fault driver depends on factors such as who caused the crash and what insurance or other resources are available. Neither is something a driver should simply assume will replace the protection given up by choosing limited PIP medical coverage.
What Happens When a Serious Injury Exceeds Your PIP Coverage?
PIP Choice options like a quarter of a million dollars or a half million dollars may sound like a lot of money and sufficient to cover medical expenses following an accident. Sadly, however, those options likely do not even cover the cost of the initial hospitalization following a catastrophic injury resulting from a car accident.
A serious brain injury, spinal cord injury, severe burn, amputation, or other catastrophic injury involves far more than the initial hospital bill. Depending on the injury, a person’s needs may include:
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Emergency treatment and lengthy hospitalization
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Multiple surgeries and specialist care
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Inpatient or outpatient rehabilitation
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Physical, occupational, or other forms of rehabilitation therapy
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Prescription medications and medical equipment
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Attendant care or assistance with daily activities
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Home or vehicle modifications
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Ongoing treatment and follow-up care
Some of those needs may continue for years. Others may continue for the rest of an injured person’s life. In those circumstances, a PIP limit is used up quickly. When choosing PIP coverage, Michigan drivers have to consider whether they want their accident-related medical protection to have a fixed dollar ceiling if the unexpected happens.
Why Is Unlimited PIP Medical Coverage So Important?
The greatest advantage of unlimited PIP medical coverage is that drivers do not have to predict the unpredictable.
No one selecting an auto insurance policy knows whether they will be involved in a serious crash next year. They certainly do not know what injuries they might suffer, what treatment those injuries could require, or how long that care could continue.
Unlimited PIP medical coverage does not impose a predetermined dollar cap on covered PIP medical benefits. For someone who suffers a catastrophic injury, that distinction can be enormously important.
Insurance premiums matter, and every household has its own financial considerations. But the cost of coverage can be weighed against the risk being accepted by carrying less of it. A premium reduction today may look very different when viewed against the potential cost of years of accident-related medical care.
Understand Your PIP Coverage Before or After a Serious Accident
The worst time to discover the limits of your auto insurance is when you are already facing a serious injury.
If you are reviewing your policy, take the time to understand what each PIP medical option actually means and consider the protection unlimited coverage can provide. If an accident has already happened, do not assume a PIP limit means you have reached the end of your potential options.
At Miller, Tischler & Vislosky, PC, we help people injured in Michigan car accidents understand their no-fault benefits and pursue the compensation and coverage that may be available to them. If you have questions about your PIP benefits or your options after a serious crash, contact Miller, Tischler & Vislosky, PC to discuss your case and determine what steps you can take to protect your recovery.
