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Michigan Auto Insurance Reform Update

Jun 12, 2019 Decorative image, autos driving on Gratiot in Detroit

Michigan automobile insurance reform has long been a heavily discussed and debated topic. What seemed like a stalemate for years suddenly gained momentum. In a historic move, Governor Gretchen Whitmer signed a bill into law on May 30, 2019.

The new law, which won’t take effect until July 2020, contains significant revisions to Michigan’s current no-fault auto insurance law, including:

  • Ability to select an unlimited, $500,000 or $250,000 personal injury protection (PIP) option
  • Option for seniors on Medicare to opt out of purchasing PIP coverage entirely
  • Ability for Medicaid recipients to purchase a PIP policy of $50,000
  • Enhanced coordination with health insurance
  • Mandatory rate rollback on the PIP line of the auto policy: 10% for unlimited coverage, 20% for $500,000, 35% for $250,000, 45% for $50,000, and 100% PIP reduction for Medicare or enhanced opt-outs
  • Fee schedule to be phased in over three years as well as new limits on attendant care
  • Default residual liability limit of $250,000/$500,000, with an insured option to reduce limits to a minimum of $50,000/$100,000 (up from $20,000/$40,000)
  • Creation of a statutory form by Department of Insurance and Financial Services that requires the insured’s signature acknowledging coverage level
  • Increased mini-tort provision from $1,000 to $3,000
  • Prohibited use of most non-driving rating factors
  • Investigation by the auto insurance fraud task force of insurers, health providers, drivers or anyone who is defrauding the system for personal benefit

Analyses of the bill can be found here:

These changes will have important implications for all Michigan personal auto insurance policyholders. Hylant will be actively following and sharing the developments and details as they evolve.

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