Michigan No-Fault Insurance Reform

Questions About No-Fault Reform?

We're here to help! On July 2nd, 2020, Michigan’s new no-fault auto insurance reform law goes into effect and Auto-Owners wants to help you understand your options.

What’s changing?

Under the old law, all drivers were required to carry unlimited Personal Injury Protection (PIP) coverage on their auto insurance policy. The new law allows drivers to select their preferred limit of protection when they renew their policy—as long as they meet the eligibility requirements.

When will the changes first impact me?

The new coverage options will apply to your policy when it renews into a term starting on or after 7/2/20. For example, if your policy is effective 12/1/19 – 6/1/20, the new options would not apply during the 6/1/20 – 12/1/20 term, but would apply on the 12/1/20 – 6/1/21 term.  If you have questions prior to your policy renewing, please contact your local independent Auto-Owners agent.

Will I be receiving any documentation explaining my options?

For Auto-Owners policyholders, 90 days prior to the renewal where the changes will be available to your policy, you will receive a packet of information including selection forms that will be required if Bodily Injury limits below 250/500 are desired, as well as for PIP selections. Proof of qualified health coverage or another policy will also be required if a PIP exclusion is desired.

Which expenses does PIP cover?

Personal Injury Protection is a coverage that includes medical expenses following an accident. Included in those medical expenses are expenses for care, recovery, rehabilitation, attendant care and some funeral expenses. PIP also includes wage loss, survivor benefits and replacement services. Generally, PIP applies to the named insured, as well as their spouse and the named insured’s resident relatives. Prior to the no-fault reform there was no option to apply a maximum limit that could be paid under medical expenses. This was often referred to as unlimited PIP.

What are the options for PIP and the requirements for each?

The options below can only be selected on a per-policy basis.


Unlimited PIP Medical coverage: This option allows policyholders to continue to receive unlimited PIP medical coverage similar to what they received prior to July 2, 2020. This will continue to be the default option for all policies in Michigan.


Limited coverage of $500,000 or $250,000: These limits represent the most that your auto policy will pay per person, per accident, for the medical expenses of an injured individual. If the expenses resulting from the claim are greater than the capped amount, additional costs could be paid by a health insurance policy or out of pocket.


Limited coverage of $250,000 with some or all persons excluded from PIP medical: If a named insured has qualified health coverage that is not Medicare, and their spouse or resident relatives has qualified health coverage, they may elect to exclude PIP medical coverage. In this case, any individual who is covered by the policy and not excluded would have up to $250,000 in coverage. Excluded individuals would have no PIP medical coverage. However, any excluded individuals will still receive coverage for wage loss, survivor benefits, and replacement services.


Limited Coverage of $50,000: This option is only available if the named insured or applicant is enrolled in Medicaid, and their spouse, as well as all resident relatives, are either also enrolled in Medicaid, have qualified health coverage or are covered by a different auto policy with PIP medical coverage.


No PIP Medical Coverage: This option is only available if the named insured or applicant is enrolled in Medicare parts A and B, and their spouse, as well as all resident relatives are either also enrolled in Medicare, have qualified health coverage or are covered by a different auto policy with PIP medical coverage. Under this option, no medical coverage is available under PIP.

What is qualified health coverage?

Included in the no-fault reform are defined characteristics that are required of health policies to be considered a qualified health plan. Specifically, the policy must not exclude or limit coverage for injuries related to motor vehicle accidents, and must not contain an individual deductible greater than $6,000. If an individual is enrolled in federal Medicare parts A and B, their health coverage would be considered qualified.

Are there other changes that I should be aware of?

Bodily Injury liability coverage covers claims made against you for injuries to others if you are at-fault in an auto accident. A default minimum for Bodily Injury is being put into place at a limit of $250,000/$500,000. If you choose, you can continue to select a coverage option as low as $50,000/$100,000, but you will need to complete and submit a form verifying your lower coverage selection. Higher limits also continue to be available.

What if I have questions?

For more information, please contact your local independent Auto-Owners agent.

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