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Guide to Michigan No-Fault Insurance Laws

Under the new no-fault auto insurance law in Michigan, drivers will have to consider a few changes that may or may not lead to better coverage and lower premiums. This new law is an attempt after 46 years of experimentation to maintain no-fault insurance and to save people money. It is best to contact a reputable auto accident attorney as soon as possible to make sure you understand how this new coverage works.

Here are a few highlights of the new law that should give a driver a working knowledge of what to expect once you review your policy and coverage.

There May Be a Few Changes from Your Current Policy

The new no-fault insurance law was passed on May 25, 2019. This law contains provisions that hope to reduce the high cost of auto insurance for consumers as well as address the costs for insurance companies. Another element that the law is designed to include is a reduction of the numerous litigations for claims and the combative atmosphere in the courtroom.
One of the first provisions to examine is that no-fault PIP (Personal Injury Protection) will no longer require a driver to purchase the unlimited PIP benefits in Michigan. Instead, he will be able to buy lower coverages of $50,000, $250,000, $500,000 and “no-limit.” This could mean substantial savings from 10% to 100% depending on what plan is chosen and the driver’s eligibility for Medicare.

These new coverages will go into effect after July 1, 2020, so there is still time to contact your auto accident attorney to make sure you have all the information you need to maintain the right coverage.

Another aspect of the new law is the protection for the consumer under the Michigan Catastrophic Claims Association (MCCA). Drivers who opt for the “unlimited” coverage will still receive benefits for catastrophic injury, and those drivers who opt to cap their payments will still have to pay the annual fee that the MCCA uses to offset deficits. This fee has risen over the years, and it is hoped that this cost will also be reduced.

No-Fault Medical Providers

The No-Fault medical fee schedule based on the Medicare fee schedule is still under development. This schedule will govern the charges from doctors, clinics, rehabilitation centers, hospitals, and any provider that treats car accident victims. Depending on the type of facility that is involved and the state classification of that facility under Medicare rules, the reimbursement will range from 195% to 250% of the amount payable under Medicare. This schedule will be available for review and interpretation by July 2020, and an auto accident attorney will always have the latest updates to share with you if you are in an accident.

Premium Rate Considerations

Auto insurers, after July 2020, will not be able to base insurance premiums on non-driving factors such as gender, marital status, home ownership, education level, credit level, occupation, or the postal zone in which the driver resides. This new ruling should also help to reduce premium costs.

Independent Medical Examinations

There will be new rules imposed on Independent Medical Examinations (IME’s) of insurance company hired doctors. The IME doctors must be licensed in Michigan, if a specific type of physician is required, then the examining physician must have the same specialty, and during the year before the IME, the attending doctor must have been actively involved in clinical practice or an accredited medical school.

Final Thought: Involvement from the Insurance Commissioner

There may be a time during an insurance claim when a victim feels that the insurance company is not paying for the extent of the injury. In this case, the new law in Michigan requires that the Insurance Commissioner create a page on the state website that will allow the victim to contact the Commissioner’s office to seek assistance. A qualified auto accident attorney can help with this call.