We understand that Michigan no-fault insurance reform can be confusing, leaving you uncertain about the coverage you need or how much it will cost. We’re here to help.
1. What is Changing with Michigan No-Fault Insurance Reform?
PIP – Personal Injury Protection (PIP) will transition to tiered levels of coverage. Drivers can choose from various tiers that best fit their needs:
- Unlimited (the current level under existing law—all insured drivers currently have this tier)
- $500,000
- $250,000
- $50,000 – Medicaid required
- PIP Exclusion/Opt-out – Medicare A&B or a Qualified health plan for all household members is required to choose this tier
BI – Bodily Injury (BI) limits will increase from the current state minimum of $20K/$40K (per household/per accident) to $50K/$100K. The default minimum and Kapnick’s standard recommendation is $500K/$500K, with higher limits available.
2. Cost Savings Under Michigan No-Fault Insurance Reform
The No-Fault Reform aims to make auto insurance more affordable for Michiganders. While the exact savings are unpredictable, drivers can expect:
- A mandatory reduction in the PIP portion of the policy, ranging from 10-45% depending on the level selected
- A potential increase in the BI portion rate, though the exact amount is unknown
The law also prohibits the use of factors like gender, marital status, home ownership, education, occupation, credit score, or zip code in determining rates.
What is the MCCA and the MCCA Fee?
The Michigan Catastrophic Claims Association (MCCA) reimburses auto no-fault insurance companies for PIP medical claims exceeding a set limit. Under the reform:
- The MCCA fee reduces to $100 for unlimited PIP coverage
- For all other PIP selections, the MCCA fee is not applicable
