New Michigan Law Changes PIP Coverage Forever

The State of Michigan is well-known for its steep auto insurance coverages and costly personal injury protection requirements, or PIP. However, serving State Governor Gretchen Whitmer recently announced new bipartisan legislature with members of the Michigan government that plan to revolutionize the future of state mandated PIP forever.

Personal Injury Protection Coverage (PIP) is offered by insurance companies in the event of a severe collision requiring medical coverage. Michigan State Law mandates that insurance carriers be responsible for holding unlimited lifetime medical coverage, contingent upon certain factors that result in an assigned monthly rate. Not all States require drivers to own such exhaustive PIP coverage, and some do not require PIP at all. In fact, Washington State Law (RCW 48.22.100) affirms that motorists are not required to own PIP coverage, but can add some to their insurance portfolio if they so wish.

The new “auto no-fault” legislation will be ratified into law on July 1, 2020, available to all motorists in Michigan. Drivers are now able to specifically choose the amount of PIP they desire to carry, from unlimited coverage to a slim $50,000 option offered to those using Medicaid and health insurance plans. In some cases, residents can opt out of PIP coverage entirely.

In addition to changing coverage requirements, the law will also ban insurance company’s use of non-driving factors to determine rates, including:

  • Zip Code or City Location
  • Marital Status
  • FICO Credit Scores and Averages

This may seem like an exciting turn of events for motorists, but many attorneys and law officials are less enthused.

The legislation’s rushed timeline has made some individuals wary, unsure of the potential ramifications the law could have on the insurance industry and the safety of the consumer. Saving money on auto payments per month by lowering or waiving PIP protections may not necessarily be a wise decision should a vehicle collision occur. In fact, some drivers may no longer be able to pay for claims against them without proper PIP coverage.

Consumers from Michigan are encouraged to begin doing research now to understand more about PIP and the types of coverage they should own. For more information about this law and PIP options, reach out to an experienced official.