In the past, all Michigan residents who purchased auto insurance would receive unlimited medical protection under their Personal Injury Protection benefits. This was a great system that allowed for the injured individual to receive the best care possible in order to allow them to recover from their injuries and to hopefully get back to their pre-accident status.
Starting with a law change in 2019 and a policy change in 2020, the system has shifted. In the new system, different insurance companies are allowed to handle benefits differently, at different levels and different prices. As a consumer, you are still able to select an unlimited plan if you can afford one. If you are financially able, it is definitely suggested that you continue with unlimited coverage. This will ensure that no matter how severely you are injured, even if your injury is catastrophic and requires treatment and care for the rest of your life, you will be taken care of.
A lot of people didn’t realize these ramifications when the law changed in 2019 and actually went into effect in 2020. Now, one year later at the end of 2021, there are people who selected limited policies and then were catastrophically injured, and now they don’t have the coverage that they need moving forward.
Of course, most people are not going to be catastrophically injured in an auto accident. However, just like any type of insurance, you purchase unlimited auto insurance for the peace of mind knowing that if something catastrophic does happen, you’re going to be covered and you’re not going to have to find other ways to pay those bills.
If you still want to reduce your unlimited coverage to a limited policy, it is suggested that you have a policy of $250,000 or more. That way, if you get into a fender bender and you need 6 months or 8 months of medical treatment, there will be enough there to cover that.
On the other hand, if you get into an accident and you need surgery, then that $250,000 may not cover you after all. However, the changes in the law do provide alternate avenues. For instance, one change makes it so that you are now able to claim certain medical bills in any bodily injury/pain and suffering case. That way, if you are not at fault for the accident, you may have the ability to claim any medical bills in excess of your $250,000 policy against the person who was at fault for the accident.
So, whether or not you get unlimited coverage, there will still be opportunities to get those bills covered. However, the best way to make sure that they get covered is for you to maintain a high limit of medical coverage, or, preferably, unlimited medical coverage. If you don’t have the financial means to do so, I would just try and get as much coverage as you can based on your particular circumstances. I would not suggest selecting, say, a policy with a $50,000 limit if you have Medicaid or Medicare coverage or if you have the financial ability to pay for a higher level of coverage.
When it comes to people with Medicare or Medicaid coverage in Michigan, there is an option to “opt out” of having medical coverage on your auto insurance, and getting a $50,000 coverage plan through Medicaid or Medicare instead. The issue with that is that Medicaid and Medicare coverage is limited. They only allow you to have a certain amount of physical therapy, or you will be limited to certain in-network doctors. In many personal injury cases, you have to have the freedom to try more experimental treatments that may not be covered by Medicaid and Medicare. With a higher level of coverage on an auto policy for Personal Injury Protection claims and benefits, you will have the freedom to pursue many different types of treatments with different doctors.
In some cases, it might make the most sense to opt out. However, I would highly encourage anyone considering it to look closely at their insurance policy. If you’re covered by a Qualified Health Plan, meaning you have coverage through your employer or you have your own private health insurance, you simply have to know what is really covered in your plan in order to make that sort of decision.
Many of these plans do have limits on the type of services you can receive and the doctors you can see. If you have a more limited plan and you’re thinking of opting out of having medical coverage when you’re injured in an auto accident, you really need to understand what is covered in your health insurance plan before you make that decision.
As mentioned above, there are also changes to the law that make it easier to pursue some types of medical claims. Specifically, the legislature has allowed for individuals to claim excess medical bills and future medical bills in their claims for pain and suffering and bodily injury. Therefore, you might have a chance to claim medical bills regardless if you are not at fault.
But again, if you have the financial ability to pay for more coverage, it is advised that you do so. You should do this in case something happens that does not allow you to fall back on the pain and suffering/bodily injury rule. Specifically, what happens if you are at fault or an accident? What happens if you strike someone, or strike multiple people, and they are seriously injured and don’t have coverage, or have limited coverage, themselves
In a case like that, you could be on the hook for their excess medical costs. If their injuries are significant, even with that recommended minimum $250,000 in coverage, their bills will quickly exceed your coverage limit. If they’re, say, in the hospital for a month, or if they need surgery because they broke their leg, that $250,000 will be gone within the first 5 days of treatment. After that coverage runs out, you could be left on the hook for those expenses that are in excess and in the future.
So, as a general rule, it’s a very important that you protect yourself. For senior citizens and those who have limited financial means, you are technically legally allowed to select $50,000 in medical coverage and/or bodily injury coverage. However, this is so highly unrecommended that in order to actually opt into the $50,000 plan, you have to show that either you have limited financial ability to pay for a more substantial plan, or you’re a senior citizen, or you don’t drive that much, or some combination of those three elements. You also have to sign documentation that you understand that this policy is a significant risk, and if you cause an accident and severely injure someone, you could be on the hook for a significant amount of money.
If you have questions regarding your policy or how to better protect yourself, you should always feel free to contact the Department of Insurance and Financial Services for the state of Michigan (sometimes referred to as DIFS). They have guides to learn more about Michigan’s new auto-insurance laws that you can read on their website, or you can call them up and speak to a representative. Alternatively, you can always call our office and we would be happy to explain things to you.
For more information on Recent Changes To Insurance Laws In Michigan, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (248) 266-7600 today.
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