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Michiganders: Your No-Fault Auto Insurance Is Changing

January 1, 2020

On May 30, 2019, Governor Gretchen Whitmer signed Senate Bill 1 into law. The intent was to make auto coverage more affordable by giving drivers coverage options.

Three Things You Need to Know

First, for policies taking effect after July 1, 2020, Michigan drivers will be asked to complete a form and elect the amount of Personal Injury Protection (PIP) coverage they would like. PIP covers auto accident-related medical expenses and lost wages for insured drivers. In the past, Michigan drivers had unlimited PIP coverage. The new options (and cost reductions over 2019 rates) are as follows:

  • Unlimited coverage (10% estimated PIP premium reduction)
  • $500,000 coverage cap (20% estimated PIP premium reduction)
  • $250,000 coverage cap (35% estimated PIP premium reduction)
  • $50,000 coverage cap/Medicaid enrollees only (45% estimated PIP premium reduction)
  • Medicare opt-out (100% estimated PIP premium reduction)
  • Qualified health coverage exclusion (100% PIP premium reduction)

If you do not make a selection, your policy will be issued with unlimited PIP medical coverage.

Second, those who choose to retain unlimited PIP coverage will see a 55% reduction in the Michigan Catastrophic Claims Association (MCCA) surcharge they have paid in the past. From July 2, 2020 to June 30, 2021, the fee will be $100 instead of this past year’s $220. Those who choose less PIP coverage will not have to pay any fee, as long as the MCCA is not in a deficit position. MCCA is a non-profit entity established by the state to reimburse auto no-fault insurance companies for PIP medical claims. You can learn more here.

Third, the new law requires insurance carriers to increase automobile liability coverage for bodily injury from $20,000 per person/$40,000 per accident to a minimum of $50,000/$100,000 or a default of $250,000 per person/$500,000 per accident. This change likely will add cost to the overall premium.

If you do not make a selection, your policy will be issued with the default liability limits of $250,000/$500,000.

What You Need to Do

When you receive your Michigan auto-renewal policy notice for coverage renewing after July 1, 2020, carefully consider your PIP and bodily injury coverage options. Weigh the risks and benefits of coverage versus cost (which will be noted as part of the paperwork). Complete and return the required forms to make your preferences known and to avoid default limits from applying.

More Information

To learn more and for the latest updates, visit the State of Michigan’s site at

These changes are historic in nature, and insurers are still grappling with how to implement them. Will we be sharing more information before they take effect. Until then, contact your insurance carrier or your Hylant service team member if you have questions about these changes.

The above information does not constitute advice. Always contact your insurance broker or trusted advisor for insurance-related questions.

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