Car Insurance Michigan – When was the last time you looked at your car insurance policy? Can you explain what each cover item means?
If your answer is, it’s been a while, or please don’t quiz me, you’re in good company. Car insurance is one of the most complex products you can buy.
Car Insurance Michigan
But it’s more important than ever that you understand your coverage. Michigan’s 2019 no-fault auto law creates greater risks for drivers and passengers.
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Image from the Michigan Department of Insurance and Financial Services Here’s where you can see PIP on your insurance form. Click to enlarge.
All drivers in Michigan usually have unlimited medical coverage in their policies, to pay for their own or a passenger’s medical care after a car accident. This coverage is in the PIP (personal injury protection) section of your policy. Current law allows people to choose lower medical coverage limits instead of unlimited ones. Most people can choose as much as $250,000 in coverage. People on Medicaid can opt out for as little as $50,000, and people with Medicare can opt out of PIP altogether.
However, the experts we consulted agreed to advise people to stick with the unlimited medical PIP in their policies. Wayne State University law professor Wayne Miller said the cost of hospital treatment and post-hospital care for a serious accident can exceed $250,000, and in the worst case scenario, it can reaching millions of dollars. Miller says that skimping on PIP coverage is “an ostrich approach to buying insurance. You know, ‘It’s never going to happen to me.'” And of course, statistically, it’s unlikely that a serious, expensive, life-changing accident will happen to you. will happen. There are millions of drivers in the state of Michigan, and “only” thousands of people who have been injured like this. buy insurance to protect from the worst situation. That’s why.”
Michigan’s former no-fault law used to require auto insurance companies to pay reasonable fees for medically necessary care for those injured in auto accidents, including the most catastrophic injuries for life The automatic no-fault law of 2019 sets a level limit for that treatment. Brain and spinal cord injury rehabilitation centers, and agencies that provide home care, can only charge 55% of what they use to care for car accident victims. For most of these agencies, that amount is less than the cost of providing care. That is why many have gone out of business, or have stopped taking car accident patients.
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So while our experts still urge people to keep their PIP unlimited, it’s not the same coverage it used to be. In many cases, people with catastrophic injuries will no longer be able to receive professional care at home, or extensive rehabilitation services in specialized residential clinics.
Brandi Marsh is often the sole caregiver for her five-year-old quadriplegic daughter, due to the automatic no-fault law of 2019. “Her life is in my hands,” she says, fearing that exhaustion will make her a life threatening mistake.
The law also limits the number of hours a family member can be paid to care for a seriously ill loved one at home. Families are limited to a total of 56 hours per week, and must seek institutional assistance for the rest, if their loved one needs 24/7 care. Many were unable to receive institutional care after the law changed.
Here’s a “worst case” scenario that our experts say — especially those with significant assets — should consider: What happens if you don’t have liability coverage for physical damage? It’s the part of your policy that pays for injuries you cause to others in an accident. Lansing personal injury attorney Steve Sinas said that while everyone has unlimited medical coverage, they usually don’t need to ask the other driver to get the care they need. Now, if they are injured by someone with important property, they are more likely to sue that person.
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“Let’s say a child is playing in the street and you’re driving home, and you happen to be rich and you look at your phone because you have a text message or something like that, and you haven’t seen that child. that child and they need to care for the rest of his life,” Sinas said. “And let’s say the parents buy $50,000 of medical expense coverage because they’re on Medicaid, or the $250,000 limit. That child will only be covered up to that limit. So now they have to apply for their medical expenses. So we have Now you need to insure more on the other side of the equation, which is with more liability insurance.
Sinas said wealthy people should consider buying an “umbrella” policy. An umbrella policy provides additional money, sometimes several million dollars, to cover the medical expenses of someone you injure, in addition to the coverage of your auto insurance policy.
He also said that no matter what your economic position is, if you can, you should carry uninsured/underinsured coverage. It is not required by law that you have it, but it adds to the benefits that you can claim if you are injured by someone who drives without insurance, or drives with a very low limit.
The short answer is, on average, no. Four years after the passage of our no-fault law, Michigan is once again the most expensive state in the nation for auto insurance, according to the consumer website, ValuePenguin.
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Doug Heller, director of insurance for the Consumer Federation of America, said the law offers phantom savings by requiring insurance companies to reduce the cost of personal injury coverage, but not others. part of your policy.
“So much of the savings is eaten up by switching PIP premiums to other coverages,” Heller said. “Insurance companies are free to increase other parts of your premium, and a place where you see that is bodily injury liability. So it comes out of a different pocket, but it’s the same pair of pants.
On July 1, 2023, your insurance company must add a $48 fee to the Michigan Catastrophic Claims Association assessment on your policy. Even if you do not have unlimited medical coverage for life on your policy, which includes MCCA, you will have to pay these extra costs. You can learn more about these fees here.
Doug Heller said if Michigan lawmakers really want to lower auto insurance costs, as well as make them fairer, they should give the Department of Insurance and Financial Services the authority to control insurance company profits, such as the Michigan public service. The commission controls the profits of the utility company. And he said the state should limit the ability of insurance companies to charge people more based on non-driving factors, such as where they live or if they don’t have a good credit score.
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Wayne State professor Wayne Miller says instead of lowering your coverage limit, make a few calls to other insurance companies and see what they’re paying you for the same coverage you have now.
“The number one piece of advice I would do is shop around,” Miller said. “It’s really amazing the difference between insurance companies for the same coverage, for the same demographic group.”
It is also good to remember that while you may feel loyal to your insurance company, your insurance company may not feel the same way about you when setting your rates.
Doug Heller said that it is not a common practice for insurance companies to track your buying behavior for all the “loyalty” markers, and they charge you more because they tend to stay with the same company every year, instead of shop around.
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Wayne Miller said the second best way to save money on car insurance is to consider dropping collision and comprehensive coverage if your car is more than five years old and you have a safe driving record.
“No matter how long you keep your vehicle, it’s a depreciating asset,” Miller said. “And the cost of insurance to not depreciate at all. So if you really want to save money, consider the old old canceling your collision and comprehensive.
Finally, you can call your health insurance company and see if you can designate your health insurance as the first to pay for the accident. This can sometimes lower the cost of car insurance – but be sure to check with your health insurance company before making any changes to your car insurance policy.
For an explanation of other parts of your insurance policy, check your state’s coverage guide here.
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Tracy Samilton covers energy and transportation, including the auto industry and business responses to climate change for Michigan Radio. He began his career at Radio Michigan as an intern, where he was immediately “bitten by the radio bug,” and never recovered. The cheapest auto insurance companies in Michigan are Secura, Chubb and Travelers. Michigan drivers can save up to $4,856 a year on auto insurance just by shopping around and comparing quotes.
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