Michigan’s Personal Injury Protection (PIP) Benefits Explained

Not long ago, Michiganders with car insurance enjoyed some of the most comprehensive protection available anywhere in America if they were hurt in an automobile accident. Unlimited Personal Injury Protection (PIP) benefits – which were formerly mandated by the state’s No-Fault auto insurance law – ensured that injured Michigan drivers and their passengers could receive all the essential care they required to recover from their injuries and to live their best possible lives following even truly devastating accidents. The state’s mandatory PIP benefits also helped replace up to three years of lost wages for people unable to return to work due to their injuries.

But changes to Michigan’s No-Fault insurance law, which became effective starting in 2020, have ripped away some of that valuable security blanket, putting state residents at significant financial risk (as we explained in another article) if they’re ever injured in a car accident. Ironically, those changes were intended to help reduce automobile insurance premiums for Michigan drivers, but instead they’ve led to some tragic unintended consequences with no real cost savings at all. It’s turned out to be a classic example of the cautionary phrase “be careful what you wish for.”

Indeed, numerous drivers across the country as well as here in Michigan who have chosen insurance policies with something less than unlimited PIP benefits have discovered this to be the case. Consider, for example, the situation of one unfortunate New Jersey driver who had what he might have imagined was a perfectly adequate $250,000 PIP limit … but whose medical bills after an accident topped $700,000 – leaving him personally on the hook for an enormous unpaid balance!

We don’t want that to happen to you. And fortunately, it doesn’t have to. You can still choose unlimited PIP benefits in Michigan … although you may be tempted to settle for less protection to save on your car insurance premiums. In our opinion, that would be – to use another cautionary catch phrase – penny wise and pound foolish. Let’s take a moment to explain how PIP coverage works under Michigan current law to help you understand your choices so you can make the best possible decision for yourself and your family when buying your car insurance policy.

What Is Personal Injury Protection (PIP)?

As we’ve already noted, PIP coverage in Michigan is intended to cover medical expenses and lost wages up to the limit you choose when purchasing your car insurance policy. Under current state law, selecting lower PIP coverage limits may reduce your car insurance premiums. On the other hand, opting for unlimited coverage (which we always recommend to our clients) will definitely cost you more up front. Even with unlimited coverage, however, you could still end up in dire straits, because the changes to No-Fault laws that took effect in 2020 also reduced payment levels for health care providers to just 55 percent of what they had previously been paid for treating car crash victims. That dramatic reduction in revenue caused many providers to either lay off workers, go out of business, discharge long-term patients from their facilities, or even to entirely refuse to offer care for accident victims – as this horrifying story about a little girl from Milford who was left quadriplegic after a 2021 car accident describes.

And did those changes to PIP actually save Michigan drivers money? Nope. The research experts at ValuePenguin note that we still pay the highest car insurance premiums of anywhere in the United States. As personal injury attorneys, we don’t have a solution to the seemingly perpetual problem of high car insurance pricing in Michigan, but we do know that it’s definitely not a good idea to risk financial ruin by choosing to buy cheap car insurance if you can afford something better. So, let’s talk a bit about the choices you now have to make when selecting PIP coverage, and then we’ll remind you that if you ever do find yourself injured in an accident, we will do our level best to help you recover from that horrible experience, get repaid for your medical expenses and lost wages, and be fairly compensated for your pain and suffering.

What Choices Are Available for PIP Benefits?

It might be easier to understand your PIP options if you consider a Motor City analogy. Let’s say you’re buying a new car. You might look at a budget-friendly Chevrolet, or maybe a mid-range Buick, or perhaps you’ll pop for a Cadillac (if you’d rather substitute Ford or Lincoln here instead, it’s all the same to us!) At the end of the day, the make and model of the vehicle you end up buying will depend upon your family finances and your personal preferences. The same kind of decision-making process now holds true with the level of PIP coverage you can select when buying your car insurance. In a nutshell, here’s how the Michigan Department of Insurance and Financial Services describes your options for PIP coverage limits (the parenthetical comments are ours):

1. Unlimited coverage (the only type of PIP coverage we recommend!)

2. Up to $500,000 in coverage (which means you’re responsible for all medical costs over that amount, and your protection for lost wages stops when you hit that cap)

3. Up to $250,000 in coverage (the bare minimum in Michigan … but the most you can get in some states like New Jersey)

4. Up to $250,000 in coverage with PIP medical exclusion(s)

• Exclusion is available for a named insured with non-Medicare health coverage that covers auto accident injuries and/or for household members if they have health insurance that will cover auto accident injuries.

5. Up to $50,000 in coverage

• Available if the named insured is enrolled in Medicaid and their household members have another auto insurance policy or health insurance that will cover auto accident injuries.

6. PIP medical opt-out

• Available if the named insured has Medicare (Parts A and B). Any of their household members must have another auto insurance policy or health insurance that will cover auto accident injuries.

What PIP Benefit Level Should I Choose?

Obviously, the “Cadillac” (or Lincoln if you prefer) is the first and best of all these choices. To be clear, unlimited PIP coverage is really the only good choice as far as we’re concerned. Because picking anything less than that level of protection puts you in financial jeopardy in the event you or the passengers in your car suffer major injuries in a collision and require long-term hospitalization, reconstructive surgery, or nursing care.

Ultimately, though, you’ll need to choose the amount of insurance coverage you can afford to buy, since in any circumstance it’s against Michigan law to drive – or to allow your car to be driven – without having car insurance. But, again, we urge you in no uncertain terms to choose unlimited PIP benefits. Even with the medical payment reductions we’ve mentioned above, it’s still the highest level of protection you can get to safeguard the people you love from catastrophic financial consequences in the event of a tragic accident. Quite simply, we think you’d agree that it’s worth almost any amount of money to protect the important people in your life, whose good health is truly priceless.

Where Can I Go for More Information About PIP and Car Insurance Costs?

The State of Michigan maintains a comprehensive website outlining auto insurance rules, regulations, and frequently-asked questions. It’s a great place to learn more about your options for coverage. It goes without saying that your family’s insurance agent can also advise you on choosing an affordable policy (but be sure to clearly state that you want unlimited PIP coverage!) and how to claim PIP benefits if you should ever need them. Finally, there are numerous online resources that provide price quotes from multiple insurance providers so you can easily compare your car policy options apples to apples. While we don’t officially endorse any of these sources, some you may wish to check include Policygenius, ValuePenguin, NerdWallet, The Zebra, or Insurance.com. Don’t forget, too, that price isn’t the only difference between car insurance companies – so be sure to check out their customer service ratings and other important attributes when considering your options.

Please Take Our Advice Seriously

Once you’ve been injured in a car accident, you can’t go back in time and adjust your insurance coverage to improve your situation. You need to have your coverage in place beforehand. We urge you to purchase the best policy you can afford right now to avoid having painful regrets down the road. And, for the vast majority of Michiganders, that means biting the bullet and paying for unlimited PIP protection. After an accident, when you’re seeking fair compensation for your injuries or costs that exceed your policy’s benefit limits (or which resulted from an accident that was not your fault), we promise to be there for you, too. Call us at 855-MIKE-WINS (855-645-3946) or get in touch with us here. We’ll carefully examine your coverage and help you get the most possible insurance benefits to which you’re entitled, along with working to obtain the maximum financial reparations for all the pain and suffering you’ve experienced. And our services won’t cost you one cent out of pocket. You can depend on it!

Content checked by Mike Morse, personal injury attorney with Mike Morse Injury Law Firm. Mike Morse is the founder of Mike Morse Law Firm, the largest personal injury law firm in Michigan. Since being founded in 1995, Mike Morse Law Firm has grown to over 200 employees, served 40,000 clients, and collected more than $1.5 billion for victims of auto, truck and motorcycle accidents. The main office is in Southfield, MI but you can also find us in Detroit, Sterling Heights and many other locations.