Michigan’s New No-Fault Auto Insurance Law – What Driver’s Should Know
An attorney breaks down Michigan's new no-fault auto insurance law taking effect July 1, 2020, the new PIP coverage tiers, why consumers likely won't see the savings promised, and why he recommends keeping unlimited coverage.
About This Episode
Lawyer Marc Mendelson has worked at the Mike Morse Law Firm for 17 years. In this episode, Marc joins Mike to explain Michigan’s new No-Fault law that goes into effect in July 2020. They go over who the new law really benefits and why consumers are unlikely to receive the savings they were promised.
Marc also points out that Motorcyclists will now be forced to play a game of chance with their benefits. Having seen how quickly medical bills can burn through insurance money, Mike passionately encourages Michiganders to keep their unlimited coverage.
Don’t miss this exciting and important episode!
Show Notes
- Michigan’s No-Fault Insurance law changes on July 1st, 2020
- Introducing today’s guest, Marc Mendelson
- Can you explain the new insurance policies? Which one do you recommend?
- Are there any caps on previous No-Fault policies?
- Are citizens discouraged from choosing unlimited plans?
- The cost reductions only apply to Personal Injury Protection (PIP) which is about 35% of the policy
- Does everyone have to change their car insurance on July 1st?
- What happens when the No-Fault insurance money runs out?
- What new No-Fault coverage options are available?
- “This whole thing is a scam”
- What is the Managed Care option?
- Motorcyclists have no control over the benefits they get
- How will 3rd Party Liability Insurance change?
- Marc advocates for high Uninsured Motorists and Underinsured Motorists coverage
- What changed with how Medical Providers can claim payment?
- People are going to lose everything if their bills go above their coverage
- If you are in a car accident, be honest with your insurance agent
- Tips to save money on car insurance
- Thank you for tuning in to the Open Mike podcast and please choose unlimited coverage. Learn more about Michigan’s No-Fault Insurance law
FAQs
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What are the new PIP coverage options under Michigan's 2020 no-fault law?
According to Mike Morse and Marc Mendelson, the main options are unlimited, $500,000, $250,000 and $50,000. Mendelson adds that there is a $250,000 option that lets you exclude people, and an opt-out for people with qualified coverage, such as Medicare, where everyone in the household is covered under a health insurance plan or another PIP policy. He warns that if you opt out and lose that coverage, you miss out on the no-fault benefit.
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Will drivers actually save much money by choosing less than unlimited coverage?
Marc Mendelson says the premium reductions, for example 10% for choosing unlimited, apply only to the no-fault (PIP) portion of a policy, which is approximately 30 to 35% of the policy, not to the liability or collision portions, so the savings will be smaller than most people think. Mike Morse said he doesn’t think anybody is going to see any savings.
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What happens if someone picks a lower coverage limit and their medical bills exceed it?
According to Mendelson, once that money is exhausted the person becomes responsible for it and will have to apply for Medicaid or Medicare. If they have health insurance, it will continue to pay up to that policy’s coverage limits.
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How does the new law affect motorcycle riders?
Mendelson says that under the new law’s priorities, a motorcyclist’s own insurance does not apply; what applies is the vehicle that hits them. If the owner of that vehicle picked a $50,000 policy and the motorcyclist picked unlimited, the motorcyclist has to take under the $50,000 policy. On the episode this is described as another gift to the insurance companies.
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What do Mike Morse and Marc Mendelson recommend drivers do when they get their coverage-choice letter?
Mike Morse says that when the letter comes, don’t change coverages: stay unlimited, and at renewal find out how much you would save by going lower. Both advise against the managed care option. Mendelson says it offers a reduced premium but requires treating with insurance company doctors, and that in claims the insurance company doctor will say the person doesn’t need more treatment and the insurer will stop paying.
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