Recently, the Michigan state legislature removed the $300 maximum medical deductible from the No Fault Act, an act governing many aspects of auto insurance policies in Michigan.

Of course, as soon as this happened, a number of auto insurers in Michigan began to take advantage of this restriction being removed and have begun to charge extremely high dollar amounts for No Fault auto insurance policies.

The most noteworthy example of this may be insurance provider Allstate, who now offers a whopping $10,000 dollar medical deductible.

Obviously, Allstate would like you to believe this is a great way to go for car insurance. Their agents will tell you how it can lower your monthly bill and can help with medical expenses. Don’t be fooled!

This is, as you can imagine, is not exactly the case. Let’s say someone gets in a serious accident, and they have a $10,000 medical deductible on their auto insurance policy like Allstate offers, and a $5,000 deductible on their health insurance. With this plan, they would be out $5,000 no matter what after an accident that caused serious injuries and required hospitalization. And worse yet, if they didn’t have health insurance (as many Americans still don’t, despite it being required by law) you’d be hit for the whole cost of $10,000 out of your own pocket.

Even with health insurance, however, your medical bill is likely to be much higherthan the $5,000 deductible mentioned before. Factoring in things like co-pays, remaining balances, and any applicable deductible from your health insurance plan, you’ll be paying far more out-of-pocket for a serious car crash. Can you imagine having to come up with $10-$15,000 out of your own pocket for these costs?  

We haven’t even begun to factor in other medical services that might be needed after a serious car crash, and these services are often not typically covered by the average health insurance plan. Rehabilitation services like chiropractic care , certain types of diagnostic tests and many other post-accident care services would be billed to your No Fault car insurance plan, meaning you would still have to pay that huge deductible first.

If you or a loved one are ever in a major car accident, the last thing you need is something like a bad insurance scam coming between you and the care you need. If you plan on including a medical deductible on your auto insurance, it needs to be as low as possible – $500 or less is ideal, but it should be as low as you can get it.

Car accidents are an unfortunate fact of life in America. The original purpose of the No Fault Act was to help provide for car accident victims and insulate them from damages like wage loss and high medical expenses in the event of a serious accident that requires medical treatment.

However, removing the restriction on deductibles has taken these advantages away and put the money back where the insurance companies want it most: in their own pockets. Be careful out there – and don’t get taken for a ride by large deductibles.