Auto Insurance in Michigan
The Ryan Insurance Agency has over 14 years of experience. It is our job to help educate our clients on their insurance policies. Especially, when it comes to Auto Insurance and Michigan’s No-Fault Insurance System. You can visit www.michigan.gov/autoinsurance/ for more information regarding Michigan Auto Insurance.
Michigan- Auto Insurance Reform
In May of last year, the Legislature passed a new Michigan No-Fault Law known as Senate Bill 1. This new law will fundamentally change Michigan’s auto No-Fault Insurance Law. At the Ryan Insurance Agency, we are committed to helping our clients understand how these changes will impact their insurance.
Under the new Michigan Automobile insurance reform, effective for no-fault policies issued or renewed on or after July 1, 2020, individuals may choose various levels of Personal Injury Protection coverage (PIP):
- Unlimited PIP
- $500,000 PIP
- $250,000 PIP
- $50,000 PIP ( only if named insured is enrolled in Medicaid)
- Opt-out of PIP ( only if enrolled in Medicare A & B or qualified health coverage*)
* Qualified health coverage means health and accident coverage that does not exclude or limit coverage for auto injuries related to an auto accident and have an annual individual deductible of $6000 or less.
What is PIP?
Personal Injury Protection, referred to as PIP is the part of your auto insurance, and covers medical expenses and lost wages.
It is important to note that PIP coverage provides for additional services that may not be covered by an employer-sponsored medical plan, including things like:
- Modifications to your home or vehicle
- Attendant care
- Unlimited physical therapy visits
- Lost Wages
At the Ryan Insurance Agency are happy to have a conversation with you regarding PIP options, and the premiums associated with each PIP coverage limit.
If you decide to reduce your unlimited PIP coverage amount, you will need to provide proof that your medical plan is considered a Qualified Health Coverage (QHC). Please contact the customer service number on your medical ID card to request documentation of your medical plan's health coverage status. You can also request documentation to whether or your medical plan will pay primary for auto-related medical claims or "Coordination" of medical benefits.
The Basic No-Fault Policy You Must Buy Has Three Parts:
1. Personal Injury Protection (PIP)
If you are hurt in an auto accident, this part of your no-fault policy will pay all reasonably necessary medical expenses up tot the state limited on your policy. It will also pay up to 85% of the income you would have earned if you had not been hurt, for up to three years. However, the amount that you would be paid for lost income is limited and the limit is revised annually. Effective 10/1/18, the maximum is $5,700 per month. If you are killed in an accident, your policy will pay your family up to $5,700 per month for three years, depending upon what they would have received from your earnings and fringe benefits. In addition, you are entitled to “up to” $20 per day in replacement services. This is to pay for routine household services which injured persons are no longer able to provide for themselves or their families, such as housekeeping and yard work.
2. Property Protection (PPI)
No-fault will pay up to $1 million for damage your car does in Michigan to other people’s property, such as buildings and fences. It will also pay for damage your car does to another person’s properly parked vehicle. It does not pay for any other damage to cars.
3. Residual Liability Insurance - Bodily Injury and Property Damage
The law limits the damages that can be claimed against drivers as the result of an automobile accident, except in certain situations. The residual bodily injury portion of an automobile insurance policy will pay up to a policyholder’s coverage limit amounts if they are found legally responsible for damages in these situations. These amounts have been increased under the new law.
The new default BI/PD coverage limits are:
- Up to $250,000 for a person who is hurt or killed in an accident.
- Up to $500,000 for each accident if several people are hurt or killed.
- Up to $10,000 for property damage in another state.
Drivers may have the option of purchasing other BI/PD coverage limits. However, the lowest limit they may purchase is:
- Up to $50,000 for a person who is hurt or killed in an accident.
- Up to $100,000 for each accident if several people are hurt or killed.
- Up to $10,000 for property damage in another state.
Insurance You May Want to Buy:
Three of the most common types of extra insurance are described on this page.
1. Collision and Comprehensive Insurance
Your no-fault insurance DOES NOT pay for repairs to your car if it is damaged in an accident. If your car is properly parked and hit by another car, the other driver’s no-fault coverage will pay for the damage to your car. Except for this one situation, the only kinds of auto insurance that will pay for repairs to your car are collision and comprehensive coverage.
a. Collision coverage pays for repairs to your car when it is damaged in a crash. There are three basic kinds of collision insurance to choose from: limited, standard and broad form. The chart on the next page describes each type and what it covers. The deductible mentioned in the chart is the amount of money you agree to pay toward the cost of repairs before the insurance company steps in and pays the remainder. The larger the deductible, the lower the cost of your collision insurance.
b. Comprehensive insurance pays for your car if it is stolen or for repairs if it is hit by a falling object, collides with an animal, or is damaged in a fire, flood or by vandals. If you have an older car, you may not want collision and comprehensive coverage. If your car is financed, the company that loans you the money may require that you buy collision and comprehensive coverage.
2. Limited Property Damage Liability Insurance - “Mini-Tort”
Most companies offer coverage for the $3,000 liability mentioned in (d) in the section on residual liability insurance.
3. Towing and Rental Car Coverage
Towing and Rental Car Coverage is an optional coverage available from most insurance companies as an additional coverage on an automobile insurance policy. This coverage generally covers or reimburses the cost of towing and/or a rental car for covered events (accident, breakdown, flat tire, etc.). The cost is usually small in relation to the total policy premium.