Michigan No-Fault Auto Reform FAQ for policyholders

On May 30, 2019, Governor Whitmer signed a historic no-fault auto insurance reform law that will allow Michigan residents to choose their level of Personal Injury Protection (PIP) medical coverage. Under this new plan, drivers will be able to choose from a variety of options for PIP medical coverage. Prior to this reform, drivers were required to have insurance with unlimited PIP medical coverage.

At policy renewal on or after July 2, 2020, Michigan drivers with a Personal or a Commercial Auto policy will be able to select from the following options for PIP coverage:

• Unlimited PIP medical coverage – covers unlimited lifetime auto accident medical expenses.
• $500,000 of PIP medical coverage – covers auto accident medical expenses up to $500,000
• $250,000 of PIP medical coverage – covers auto accident medical expenses up to $250,000
• $250,000 of PIP medical coverage with PIP medical exclusion(s) – must meet eligibility requirements.
• $50,000 of PIP medical coverage – covers auto accident medical expenses up to $50,000 – must meet eligibility requirements.
• Opt-Out of PIP medical coverage – must meet eligibility requirements.

Qualified Health Coverage is defined in your policy as the following:

1. Other health or accident coverage in which:
• Such coverage does not exclude or limit coverage for bodily injury sustained in an auto accident
• The annual deductible for such coverage is $6,000 or less per individual or the amount as annually adjusted by the Director of the Department of Insurance and Financial Services
2. Coverage provided under Parts A and B of Medicare

Certain PIP selections will require you to provide Qualified Health Care documentation to be eligible for those coverage selections. You can find these coverage selections outlined within the letter you received with your applications.

Qualified Health Coverage documentation will need to be provided upon the initial selection of the coverage option and at each subsequent renewal. Failure to provide such coverage documentation could mean that your PIP medical coverage will be revised to a coverage selection that doesn’t require Qualified Health Coverage documentation

TA document from your health insurer or employer stating the names and dates of birth of all persons covered under Qualified Health Coverage along with a statement as to whether the coverage provided constitutes Qualified Health Coverage as defined by Michigan law or that the coverage does not exclude coverage for motor vehicle accidents and has an annual deductible of $6,000 or less per covered individual.

For Medicaid and Medicare coverage options, a copy of your government issued benefits card will work for documentation.

If you have opted out of or excluded PIP medical coverage and you lose Qualified Health Coverage during the term of your auto policy, please contact your licensed insurance agent or SECURA within 30 days of the loss of coverage. If an accident should occur during the 30-day period and you haven’t secured other Qualified Health Coverage or PIP medical coverage, you would be eligible for benefits under the Michigan Assigned Claims Plan. However, if an accident should occur after the 30-day period and you haven’t secured other Qualified Health Coverage or PIP medical coverage, you are not entitled to claim PIP medical benefits from the policy or the Michigan Assigned Claims Plan.

The Michigan No-Fault Auto Reform will go into effect July 2, 2020.

Simply put, this new reform gives you a choice. When you renew your policy on or after July 2, 2020, you may keep your Unlimited Personal Injury Protection medical coverage, which is the same coverage you have under the current Michigan No-Fault law.

If you decide to choose a PIP medical option with less than the standard Unlimited coverage, it’s important to factor in your own risk tolerance and financial situation. What happens if you are injured in an auto accident and your medical bills exceed your new coverage limit? Does your health insurance provide enough to cover that cost? If you’re unable to work, do you have disability coverage available to you?

These factors are things you should consider in selecting PIP Medical coverage limits. Your independent insurance agent can assist you in considering your coverage needs and risk tolerance.

The new law impacts not only Personal Auto policies, but Commercial Auto policies as well. Individuals and businesses who have Commercial Auto policies will also see a choice in PIP medical coverage along with the other reforms. Your independent SECURA agent can assist you in navigating through the new options prior to your policy renewal.

All SECURA auto policyholders will receive a letter several weeks before your policy renewal containing forms to complete with your new selections. If you return the necessary forms to SECURA, your policy will renew with the changes in coverage that you have selected.

If you do not return the forms to SECURA, your policy will automatically renew with Unlimited PIP medical coverage, and potentially a higher Bodily Injury limit. We encourage you to review the documents received from SECURA with your independent SECURA agent.

There are a few things you can do to prepare for this change:

• Review your policy. The new law directly impacts your Personal Injury Protection medical coverage, but understand that is just one of the coverages that’s included in your auto insurance policy. It’s important to make sure that you are familiar with all of your coverages and current limits to help you make informed insurance decisions. You should also review what medical coverage is included by your personal health insurance for injuries sustained in an auto accident.
• Talk with family. If you have a spouse or kids, you likely are not the only one that’s impacted by this new reform. Talk your plans over with your family, so everyone understands the new coverage going forward.
• Contact your agent. If you have questions, set up a time to meet with your independent SECURA agent before renewal.

SECURA will be mailing several documents relating to the Michigan No-Fault Reform to you directly. Your SECURA agent may reach out to you as well, and you can always reach out to your agent if you have questions.

You will receive several coverage selection forms prior to your auto policy’s renewal date. You can select your changes on these forms and return them directly to SECURA. We encourage you to meet with your independent SECURA agent before completing these forms.

Yes, we encourage you to speak with your independent SECURA agent.

You do not have to change your current Unlimited PIP coverage, but you will need to indicate your preference on the PIP selection form which will be mailed to you a few weeks before your auto policy renews.

Please note: if you do not return the PIP selection form to SECURA, your policy will automatically renew with the Unlimited PIP option.

For your Personal Auto insurance, it will be important for you to know how your health insurance responds to payments for injuries sustained in an automobile accident. Then, we recommend contacting your independent SECURA agent to discuss your overall coverage needs.

The bodily injury liability limit will be increased to the minimum financial responsibility limit effective on the renewal date of your auto policy. The new minimum financial responsibility limit for bodily injury is $250,000/$500,000 for Personal Auto and $510,000 for Commercial Auto because it includes $10,000 for property damage liability in a combined single limit.

The law requires that we offer you an excess attendant care coverage in excess of the $50,000, $250,000 and $500,000 PIP medical limits. Policies with Unlimited PIP  medical are not eligible for this coverage.

SECURA is introducing an excess attendant care coverage with a $10,000 per person, per accident limit. Please contact your independent SECURA agent to discuss if this new coverage option and the corresponding premium is right for your needs.

If you drive a vehicle that is provided by your employer, generally, you’ll take up coverage through your employer’s insurance company that covers the vehicle. Your second priority is your own Personal Auto policy, then that of your spouse or resident relative, then the Michigan Assigned Claims Plan (MACP). If you drive a transportation company vehicle, you’ll typically pursue coverage through the insurance company that provides coverage for your transportation company’s vehicle. 

The basic priority structure for motorcycles is unchanged. However, a motorcyclist or passenger injured in a motor vehicle accident would be limited to the PIP coverage option chosen by the owner, registrant, or operator of the motor vehicle involved in the accident.

If you have any additional questions on the Michigan No-Fault Reform, we encourage you to speak directly with your independent SECURA agent.

The state of Michigan also has a number of online resources such as:

• https://www.insurancealliancemichigan.org/no-fault
• https://www.michigan.gov/autoinsurance
• https://www.michigan.gov/difs/0,5269,7-303--502964--,00.html