Keeping up with Michigan’s No-Fault Reform can feel overwhelming, but understanding the changes is crucial to ensuring proper coverage. In this guide, we’ll break down how benefits are prioritized under the reform and what you need to know about Personal Injury Protection (PIP) and Bodily Injury (BI) updates.
What’s Changing in Michigan No-Fault Reform?
Personal Injury Protection (PIP):
PIP coverage is transitioning to tiered levels, giving drivers the flexibility to choose the coverage that fits their needs. Options include:
- Unlimited (current level under existing law)
- $500,000
- $250,000
- $50,000 (Medicaid required)
- PIP Exclusion/Opt-out (Medicare A&B required or qualified health coverage for all household members)
Bodily Injury (BI):
BI limits are increasing from the current minimum of $20K/$40K (per household/per accident) to $50K/$100K. Renewals will default to $250K/$500K unless a signed election form is submitted for lower limits.
Additionally, the reform changes how injured parties can recover losses. While the no-fault law generally protects insured individuals from lawsuits, exceptions include:
- Causing an accident in Michigan resulting in death, serious injury, or permanent disfigurement
- Accidents involving a non-resident in a vehicle not registered in Michigan
- Accidents occurring in another state
- Being 50% or more at fault in an accident causing up to $3,000 in damages to another person’s uninsured vehicle
Additional Changes:
- The Michigan Catastrophic Claims Association (MCCA) fee is reduced to $100 per vehicle for unlimited PIP coverage and waived for other PIP selections.
- Insurance companies can no longer use non-driving factors like gender, marital status, or credit score to determine rates. However, rates can still vary by territory.
Order of Priority Under Michigan No-Fault Reform
The reform also changes the order of priority for determining which auto insurance policy pays No-Fault benefits.
Current Law:
- Insurer of the Named Insured
- Insurer of a Spouse or Resident-Relative
- Insurer of the Owner or Registrant of the accident-involved vehicle
- Insurer of the Driver of the accident-involved vehicle
- Michigan Assigned Claims Plan (MACP) (unlimited benefits)
Upcoming Law:
- Insurer of the Named Insured
- Insurer of a Spouse or Resident-Relative
- Michigan Assigned Claims Plan (MACP) ($250,000 benefits)
Identify Coverage Gaps
To avoid coverage gaps under Michigan No-Fault Reform, ask yourself:
- Are there drivers listed on a policy who don’t live with the named insured?
- Are there non-family members living in the home?
- Are there family members of driving age not listed on the policy?
- Is any vehicle on the policy owned by someone other than the named insured, spouse, or resident family member?
- Does any driver not listed on the policy regularly use one of the vehicles?
- Are any vehicles used for business purposes like Uber or Lyft?
If you answered “yes” to any of these questions, you may have a coverage gap. Review your policy with our team to ensure you’re fully protected.
Looking to Learn More?
Visit our Michigan No-Fault Auto Insurance Reform page for more in-depth coverage, information, and resources.
