Know the Risks of Michigan’s No-Fault Auto Insurance Reform for Serious Accidents

Michigan auto insurance reform impacted policies issued or renewed after July 1, 2020.  A major change from the previous law was a move from mandating unlimited Personal Injury Protection (PIP) for auto accident-related expenses, to offering a menu of PIP coverage options, including a PIP opt-out, with corresponding insurance rate reductions. While hailed as a financial win for drivers, it is important to understand the new auto insurance law may have an extremely adverse impact on Michigan drivers and passengers involved in very serious auto accidents.

While guaranteed medical coverage of $250,000 or $500,000 may seem like a high number, it will not provide adequate coverage for catastrophic injuries, extended hospital stays, or prolonged home health assistance.  Moreover, in the most serious auto accident cases, follow up care, recovery and rehabilitation far exceed the emergent hospital charges. The expenses for the medical services shown below can force accident victims into bankruptcy, especially when their ability to work full or part-time is impacted:

• Physical, vocational and occupational therapy;
• Inpatient/outpatient surgery, care, recovery and rehabilitation;
• Prescription drug expenses, including needle injections;
• Durable medical equipment; and
• Attendant care for personal home health needs, including: bathing, grooming, dispensing medications, feeding, assistance with activities of daily living (ADLs) and care supervision. (Note: under the new auto reform legislation family members who perform attendant care services are limited to 56 hours per week.)

If you selected basic coverage under Michigan’s auto reform plan – or opted out of PIP coverage - and are now concerned that you will be financially unprepared should you or a family member be involved in a serious auto accident, take another look at your options.   You can change