This article was originally published in the November/December 2019 edition of the Barberi Law Insider

Insurance.BubblePrior to June 11, 2019, Michigan citizens had a few limited choices to make when purchasing motor vehicle insurance. How much coverage should I buy for bodily injury, if I am responsible for injuring someone else? The minimum coverage was $20,000 for an injured individual, or $40,000 for all injured individuals per accident. Often, Michigan citizens were encouraged to buy $50,000/ $100,000 or $100,000/$300,000 to better protect themselves should they injure someone else. Injured parties were required to cover their own medical expenses through their own insurance coverage. Michigan motorists could not be sued for another injured party’s medical expenses as long as they had purchased their own No-fault Auto insurance Coverage. That was one of the big protections of Michigan’s No-Fault Law.

When it came to uninsured or underinsured, protecting yourself, very limited choices needed to be made. Should I pay a small premium for uninsured coverage or underinsured coverage in the event that someone else injured me, but had no insurance, or very little insurance. Purchasing such coverage protected Michigan citizens who were seriously injured in an auto accident, and compensated them for their pain and suffering, excessive work loss and for their loss of social pleasures in life that was caused due to somebody else’s negligence. That was it. That is all the choices that had to be made. Perhaps, how much underinsured coverage $50,000, 100,000 or $500,000. End of choices that needed to be made.

Under Michigan’s No-fault Law that we have had in place since 1973 (for 46 years) all medical-related expenses for an injured party were covered for life. Sometimes these medical expenses could be several hundred thousand dollars and even reach into the millions of dollars in the case of a catastrophically injured individual. Currently, Michigan has about 18,000 citizens that are receiving treatment for catastrophic injuries. Such treatment for a brain injured individual, or a quadriplegic individual etc. can easily run into millions of dollars.

Now, under Michigan’s new No-fault law, Michigan citizens will be faced with numerous “choices” that they will “have to pay for” based on their election to have coverage or not to have coverage to protect themselves should they themselves be injured in a motor vehicle accident. Now, in addition to paying premiums for uninsured and underinsured motorists causing their injuries, Michigan citizens must decide “how much”, if any, medical-related expenses to provide coverage for themselves if they are ever injured in a motor vehicle accident (regardless of who is at fault for causing their injuries).

The new law places “caps” on allowable medical related expenses. These caps apply to each individual claiming benefits under Section 3107(a) of the Michigan No-Fault Law. Each person must fill out a form promulgated by the Michigan Department of Insurance of Financial Services (DIFS) that explains the benefits and risks of any level of PIP Coverage or opt- out. “Opt-Out” is making the decision to decline life-time coverage of medical-related expenses under Section 3107(a) for something less (a lower cap) including no coverage at all as the case may be in the Medicare Opt-Out or the $250,000 exclusion.

New options for medical-related expense coverage (other than unlimited coverage) allow for a lower income individual to purchase a $50,000 cap (if they qualify for Medicaid). Keep in mind that a typical 2 or 3 day stay in the hospital after an auto accident can end up with a hospital bill of $60,000 to $100,000.

The next tier cap is $250,000. There is also a $250,000 Opt-Out if the person purchasing coverage also has health care insurance coverage that extends to auto- related injuries. Michigan citizens selecting this $250,000 exclusion need to keep in mind that the current language of the new No-fault Law is so broad {Section 3901(a)(c)} and confusing that selecting this choice may also deny an injured party all PIP benefits including wage loss, replacement services, and survivors’ loss benefits. Additionally, a $500,000 cap and a lifetime option for medical – related expenses needed are also options provided to every Michigan citizen. Obviously, the lifetime option will be the best choice given to Michigan citizens, but sadly, many Michigan citizens will elect to choose one of the lower caps of coverage due to such elections simply being less expensive. Many will go with the least expensive choice and “hope for the best” when it comes to being injured from an auto accident.

And if these many choices are not enough, new attendant care options for an injured party will have to be considered. The new law limits attendant care for an injured party to be able to remain home and be cared for to only 8 hours of care per day, if such care is provided by an acquaintance or family member, rather than the 24-hour care that might be necessary. But, again you can pay more for “an attendant care rider” if your insurance company provides such an option, i.e., 16 hours per day or 24 hours per day.

And, lastly, you can “save even more money” by purchasing a “managed care” policy, where you agree to let the insurance company decide which doctor will provide your care and which health care provider will provide your care if any (thereby saving even more money!). When it comes to selecting the managed care option, my advice, is to think twice, or should I say, think 3 or 4 times, before purchasing a managed care option that allows your insurance company to decide whether you need any care at all, and if so, who will provide such care.

The bottom line is; the new law passed by our Michigan legislature will likely allow you to pay more money for the same coverage that you currently have or elect to opt – out and have less coverage than you currently have should you become injured in a motor vehicle accident and therefore “save you money along the way”. Of course, “by saving you money” your medical care will be limited to the caps that you have elected, and then you are on your own! More to come. 

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