The new auto insurance reform law, which goes into effect on July 1, 2020, allows motorists to opt out of buying personal injury protection (PIP) as part of their auto insurance if their health insurance covers auto injuries.

This can be great news for folks needing auto insurance. But, it is critical that we understand what it means to “opt out” of (PIP) Personal Injury Protection.

How Michigan’s Auto Reform Impacts Health Coverage

Navigating new public policy changes can be overwhelming, especially when wondering how they will impact you personally. You’ve probably seen some stories in the news about auto insurance reform and health coverage in Michigan. Like with any new policy change, there have been a lot of questions raised by the new law—like what it means for the average Michigan driver and how it will impact their auto insurance. We wanted to help clear up a few things about this law and how it will impact Michigan residents.

What is the new law?

The new law, which goes into effect on July 1, 2020, will allow motorists to completely opt out of buying personal injury protection (PIP) as part of their auto insurance if their health insurance covers auto injuries. This means that motorists can select the amount of medical coverage they want when purchasing their auto insurance. This law was positioned as financial relief for Michigan drivers, who pay some of the highest insurance rates in the nation. This differs from current Michigan law, which provides motorists with unlimited PIP.

What does this mean for my plan?

This new law provides consumers with more options and offers them a choice when it comes to the level of coverage. Here is a breakdown of what is available to you through different plans:

Qualified health coverage: If you are under an individual or employer-sponsored plan that covers auto insurance and has an individual deductible of $6,000 or less, you can opt out of PIP altogether.

Medicare: You can opt out of PIP altogether.

Medicaid: You can choose to purchase $50,000 or more in coverage.

All other drivers: You can choose $250,000, $500,000 or unlimited coverage.

As a result of this new law, Michigan residents may have lower auto insurance premiums because of the lessened PIP coverage on auto policies. While saving money on auto insurance may sound ideal, it’s important to remember that these savings come at the cost of reduced health coverage.

What should I do next?

While the law won’t go into effect until July 1, 2020, it’s important to understand your options now—especially with the health insurance open enrollment period (OEP) starting on Nov. 1. Work with your health and auto insurers to complete a comprehensive review of the coverage offered through your current plan and make sure you have the right coverage in the event of a catastrophic event.

By asking your health and auto insurers questions, reviewing necessary sections of the full public act , and getting a plan in place now, you will feel more confident in choosing the right coverage for you and your family.

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