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With the upcoming changes to Michigan’s No-Fault Insurance Laws in 2020, we’re introducing a series of blogs that will fill you in on the basics and help you prepare. This is the first of those blogs.
In our first blog, we covered what exactly liability coverage is, why you need it, and what these changes mean for your coverage.
Today, we’re going to talk about the specific impact these changes could have on your family. Because let’s face it, when you hear about these changes, the first thing you think about is your family and if they will still be covered. Well, we have answers.
To find out how your family will be impacted by these changes, let’s take a look at a Before and After view of No Fault.
No-Fault Before
Who was covered?
- The driver of a car
- The passengers or pedestrians who are not a resident or relative (either they live outside the home permanently or live within the home but are not related) are covered.
No-Fault Reform in 2020
Who is covered as of July 2020?
- The insured
- The insured’s spouse and a relative of either individual who is living in the same household.
- Anyone who is related to you that lives in the same house will be afforded the same coverage that you have on your policy.
Household members have been covered in the past, even if they were not related. This is no longer the case.
Keep in mind, your child’s insurance travels with them. They’re covered under you, even if you’re not in the car.
One gray area that will come up is domestic partners, couples that live together but aren’t married. In this case, we recommend having your own, individual policy to be safe.
What will your family spend?
You’re always concerned about budget and the cost of insuring your family, we get it. With the current No-Fault policies, many Michiganders get discouraged with the amount they have to pay for Personal Injury Protection, a policy they didn’t get to choose.
With No-Fault Reform, they will have the option to choose the amount of Personal Injury Protection (PIP) coverage they carry. Those options will be:
- $50,000: The applicant or insured must be enrolled in Medicaid
- $250,000
- $500,000
- No policy: The applicant or insured must be enrolled in Medicare Parts A & B
What does this mean for cost?
While many assume this change will mean significantly lower insurance premiums, they are only partially correct. Yes, there will be a slight reduction in premiums depending on your choice. But, here are some things you should keep in mind when considering making the switch:
- The premium reduction is only on the PIP portion of your policy
- The reduction will most likely be incredibly small
- If you’re injured in a car accident, your medical bills could exceed $250,000 very quickly
- If you stick with lifetime medical, you won’t see much of a change at all
If you’re thinking of choosing a lower coverage amount in July, please reach out to your insurance agent to find out what this could mean for you and your family. If you don’t have an agent you can reach out to, please give us a call.
We want to make sure every Michigan driver is comfortable with their policy and covered when something happens.
