LANSING, Mich. — New auto insurance rates have been approved by the state, and the agency that handles insurance in Michigan says the rates will be lower than a new auto insurance law requires.
A new law effective July 1 makes changes in the Personal Injury Protection, which until now has paid for all medical expenses resulting from crashes. The new law allows drivers to choose how much PIP coverage they want to pay for, including keeping unlimited coverage. Michigan is the only state that allows it.
The Michigan Department of Insurance and Financial Services says insurance companies have submitted their proposed new rates, and 99.5 percent of them have been approved. DIFS says the rates on average are lower than required by the new law.
While allowing less PIP coverage, the new law raised the mandatory level of bodily injury coverage, which limits the amount an insurance company must pay if its driver is found liable for damages in a crash. Still, DIFS says rates are lower than required by the new law.
The new law allows six levels of PIP coverage to be offered:
- Unlimited coverage, which up to now was required.
- Up to $500,000 coverage
- Up to $250,000 coverage
- Up to $250,000 coverage with exclusion available if the insured motorist and/or household members have non-Medicare health insurance that covers car crash injuries.
- Up to $50,000 coverage if the insured motorist is enrolled in Medicaid and household members other auto or health coverage that covers car crash injuries.
- PIP medical opt-out if the insured has Medicare Parts A and B and other household members have other auto or health policies that cover car crash injuries.