With the application of Michigan’s No-Fault reform bill, many have questions regarding its effect on their insurance costs. Not too long ago, we analyzed the current insurance rate with Ohio, finding that it was three times more than Michigan’s. Now that new drivers are coming out of high school and are on the road, it’s time to know what changes to expect as new insurance rates start to go into effect.
Michigan’s Personal Injury Protection (PIP) no longer defaults as “unlimited”
Before the No-Fault reform bill passed, any driver within the state of Michigan was required to pay for Michigan’s PIP benefits. Now, as sectioned off by different coverage levels, Michigan PIP benefits are optional regarding the full amount of coverage one can receive. While this makes purchasing PIP more flexible, it also means new levels of coverage with exclusion from the base coverage that the previous PIP benefits provided. In layman’s terms, it’s possible that the protection given to your driver has changed drastically based on the amount you pay on PIP benefits.
Higher minimums for liability bodily injury insurance
In the event that your driver is injured during a car crash, the minimum insurance has more than doubled for liability bodily injury insurance. For example, before the No-Fault reform bill passed, the minimum limit for the injury of one person was once $20,000; now, the minimum sits at $50,000. This makes insurance reliability more difficult to maintain, with car crashes creating more of a risk for those under lighter insurance plans.
Compensation for serious bodily impairment follows new parameters
When the consequences of a fatal car accident becomes dire, one might consider suing for damages. While it’s easy to assume that most cases might be open and shut for those that heavily suffer from a car accident, the No-Fault reform bill makes this process a grey area. Specifically, the injuries brought upon the driver must fit a new definition for “serious impairment of body function”. Because of this, your driver’s minor injuries are less likely to gain reasonable compensation from a car accident, giving fewer options for those looking for help while regaining their health.
In any case, the best way to avoid these problems is to promote and practice safety on the road. Insurance may change based on income, business, and government regulation, but being a safe driver is universal.