Changes to Auto Insurance in Michigan Will Bring Down Cost But May Not Provide Adequate Coverage if Injured

A new auto insurance law will take effect for insurance policies that issue or renew after July 1, 2020, and Michigan drivers will be able to choose how much PIP medical coverage to purchase with their policies. PIP medical coverage pays for medical care, recovery, rehabilitation, and some funeral expenses if a person is injured in an automobile related accident. The new options for choosing PIP coverage could mean a reduction in insurance premiums for Michigan drivers.

“This is great news for Michigan drivers and their families,” said Governor Gretchen Whitmer. “Last year, we worked across the aisle to pass a historic, bipartisan auto insurance reform to bring down costs for drivers everywhere. It’s great to see that it’s paying off for Michiganders, especially during a time when drivers may need extra money in their pockets. I look forward to continue working across the aisle to ensure lower rates for Michiganders.”

Karen Mundt of Ft. Gratiot is not sure what these changes will mean for her family. Her son Joseph suffered a permanent brain injury in 1995 after being hit by a car while playing outside his home. PIP medical coverage from the driver’s auto insurance has provided Joseph with 24 hour care for the last 25 years. Karen suggests people consider the risks of reducing PIP coverage on their policies.

The options for PIP medical coverage that will be available to Michigan’s insured are $50,000, $250, 000, $500,000 and unlimited. The lower the amount of coverage, the lower the cost of premiums. While drivers may be tempted to save money, Karen said that even $500,000 is not enough for most victims of a catastrophic accident: Joseph’s care was over $500,000 in the first year after his injury.

Auto insurance companies are preparing for these changes, and can inform their clients about the risks and benefits involved with selecting coverage.

Reporting for WGRT – Jessie Wiegand