Major changes are now in effect for Michigan drivers under the state’s new no-fault insurance law, which aims to save drivers money.
The changes took effect July 2.
But experts warn, there’s a lot to think about when renewing your policy.
“You will for the first time have consumer choice,” said Jordan Acker with the Goodman Acker Law Firm. “It’s supposed to reduce the rates for all Michiganders. And that, in and of itself, is a great thing,” he said of the insurance reform legislation, which passed last May.
When it comes to Personal Injury Protection, which makes up about half of a policy’s cost — drivers will no longer be required to purchase unlimited coverage.
Drivers can now opt to decrease coverage to $500,000 or to $250,000, or opt out altogether if they have qualifying medical insurance.
Drivers should expect to save anywhere from 10 percent to 100 percent if they opt out completely on the Personal Injury Protection portion of their bill.
Acker suggests if a driver can swing it, to purchase more instead of less.
“Buy the most you can. If you can afford unlimited, buy an unlimited plan,” he said.
The reason being — people don’t realize how expensive medical bills can be until they’re faced with them.
People like Edward Mainguy of Port Huron, who credits the previously required unlimited coverage for allowing him to continue to get treatment after a crash in 2018.
“I swerved to miss some deer that were crossing the road. Car flipped over and I saw this bright light and I’m thinking oh darn I wrecked my car,” Mainguy told 7 Action News.
Instead of just wrecking his car, he woke up in the ambulance with a broken neck. In the past 18 months, he’s required not only surgeries but regular occupational therapy at Detroit Medical Center.
Without unlimited PIP, he fears he would have been financially ruined.
“Just the medical costs. I can’t imagine the price of the neurosurgeons. And not to mention that I had three different surgeries on my neck,” he said.
Another thing to keep in mind, is that drivers could not be held liable for someone else's medical bills following a crash due to changes in Personal Injury Liability.
Insurance companies are sending out renewal selection paperwork 45 days prior to the end of your policy, but if you don’t make your selection, your policy will be automatically renewed at a state default, which includes unlimited PIP.
Acker said it’s going to be incumbent upon drivers to be proactive about making changes to their policies, and also hold insurance companies accountable if they don't see savings reflected. Companies aren't obligated to offer the savings until it's time for your policy to be renewed.
Learn more about the changes to expect under the new law here.