In 2019, Michigan enacted the most significant changes to its auto insurance system in nearly 50 years. These reforms, which took effect on July 1, 2020, fundamentally transformed how Michigan drivers purchase auto insurance and how accident victims receive benefits. If you’ve been in a car accident or are reviewing your insurance coverage, understanding these changes is critical to protecting yourself and your family.
The Biggest Changes at a Glance
1. PIP Coverage Is No Longer Unlimited for Everyone
What Changed: For decades, all Michigan drivers were required to carry unlimited lifetime medical coverage (Personal Injury Protection or PIP). Now, drivers choose from multiple PIP coverage levels when purchasing their policy.
Your Options:
- Unlimited/No Limit – Covers all reasonable medical expenses for life (most similar to the old system)
- $500,000 – Medical coverage capped at $500,000
- $250,000 – Medical coverage capped at $250,000
- $50,000 – Available only if you’re enrolled in Medicaid
- Opt-Out/$0 – Available only if you and all household members have Medicare Parts A & B or other qualifying health insurance
Why This Matters: If you choose limited coverage and your medical bills exceed your PIP limit, you could be personally responsible for the remaining costs—even if the accident wasn’t your fault. A catastrophic injury could result in hundreds of thousands of dollars in medical bills that fall on your shoulders if you don’t have adequate coverage.
2. Higher Bodily Injury Liability Requirements
Old Minimums: $20,000 per person / $40,000 per accident
New Standard Minimums: $250,000 per person / $500,000 per accident (though drivers can elect reduced limits of $50,000/$100,000)
Critical Change: For the first time since 1973, at-fault drivers can now be held personally liable for medical expenses their insurance doesn’t cover. If you cause an accident and the victim’s medical bills exceed your bodily injury coverage, they can sue you personally for the difference.
Our Recommendation: Purchase the highest bodily injury liability coverage you can afford. The increased risk of personal liability makes this more important than ever, especially given that serious accident injuries can easily exceed $250,000 in medical costs.
3. Attendant Care Benefits Are Now Limited
What Changed: Under the old law, there was unlimited payment for family-provided in-home attendant care. As of July 1, 2021, family-provided in-home attendant care is limited to 56 hours per week.
Exception: Commercial agency care and residential facility care remain unlimited for those with unlimited PIP coverage.
Impact: This change particularly affects families caring for catastrophically injured loved ones at home. The 56-hour weekly limit may not be sufficient for individuals requiring round-the-clock care.
4. Medical Fee Schedules
The new law caps what healthcare providers can charge for auto accident-related treatment at a percentage of Medicare rates. While this was intended to reduce costs, many specialized care providers have stopped accepting auto insurance patients, creating access-to-care issues for seriously injured victims.
What Benefits Am I Entitled to After an Accident?
Your benefits depend on what PIP coverage level you selected when you purchased or renewed your policy:
If You Have UNLIMITED PIP Coverage:
- All reasonable and necessary medical expenses (no cap, no time limit)
- Wage loss benefits up to $6,811 per month for up to 3 years (adjusted annually each October)
- Replacement services (household tasks you can no longer perform) for up to 3 years
- Attendant care (up to 56 hours/week for family-provided care; unlimited for commercial agency care)
- Mileage reimbursement for medical appointments
- In some cases, vehicle and home modifications
If You Have LIMITED PIP Coverage ($50,000, $250,000, or $500,000):
- Medical expenses up to your policy limit
- Once you exhaust your PIP limit, you may need to rely on your health insurance, Medicare, or out-of-pocket funds
- The same wage loss, replacement services, and attendant care benefits as unlimited coverage
If You OPTED OUT of PIP Coverage:
- No-fault insurance will not pay for any medical bills
- You must rely entirely on your health insurance or Medicare
- You still receive wage loss and replacement services benefits
Important: Your PIP benefits are paid regardless of who was at fault for the accident.
How Long Do Benefits Last?
This is one of the most complex aspects of the reformed law:
Medical Benefits:
- Unlimited PIP coverage: Lifetime coverage for all reasonable and necessary medical expenses
- Limited PIP coverage: Until you reach your policy limit
- No PIP coverage (opted out): No coverage for medical expenses
Wage Loss & Replacement Services:
- Maximum of 3 years from the date of the accident, regardless of your PIP coverage level
Attendant Care:
- Unlimited PIP coverage: Lifetime benefits (subject to 56-hour weekly limit for family-provided care)
- Limited PIP coverage: Until you reach your policy limit
- No PIP coverage: No attendant care benefits
Can I Sue the At-Fault Driver?
For Non-Economic Damages (Pain and Suffering):
You can sue only if you meet the legal “threshold” for serious injury. You must prove:
- Death, permanent serious disfigurement, OR
- Serious impairment of body function
For “serious impairment of body function,” Michigan courts require:
- An objectively manifested injury (medically identifiable with physical basis)
- That affects an important bodily function
- That impacts your general ability to lead a normal life (more than a minor interruption)
For Economic Damages (Medical Bills) – NEW UNDER REFORMED LAW:
You may now sue the at-fault driver for economic damages (medical bills) that exceed your PIP coverage limits. This is a significant change—prior to 2020, at-fault drivers were generally not liable for medical expenses.
Example: If you selected $250,000 PIP coverage and your medical bills total $500,000, you could sue the at-fault driver for the remaining $250,000 if they have adequate bodily injury liability coverage.
What If the At-Fault Driver Doesn’t Have Insurance?
This is why Uninsured Motorist (UM) and Underinsured Motorist (UIM) coverage is now more critical than ever:
Uninsured Motorist Coverage protects you if:
- The at-fault driver has no insurance
- You’re the victim of a hit-and-run accident
Underinsured Motorist Coverage protects you if:
- The at-fault driver has insurance, but not enough to cover your damages
- Your medical bills exceed your PIP limits AND the at-fault driver’s bodily injury limits
Recommendation: Purchase UM/UIM coverage equal to or greater than your bodily injury liability limits. If you don’t have adequate coverage and the at-fault driver is uninsured or underinsured, you may be unable to fully recover for your injuries.
Did the Accident Happen Before July 1, 2020?
If you were injured BEFORE July 1, 2020: The reforms do not affect you. Your coverage remains under the old law. You still have unlimited medical benefits if you were entitled to them at the time of your accident.
If you were injured ON OR AFTER July 1, 2020: Your benefits are governed by the reformed law, and coverage depends on what PIP level you selected.
Should I Keep Unlimited PIP Coverage?
This depends on your individual circumstances, but consider:
- Do you have comprehensive health insurance that covers auto accidents?
- Can you afford potentially catastrophic medical bills if they exceed your PIP limit?
- What is your age and health status?
- Do you engage in high-risk activities?
- Do you have dependents who rely on you financially?
For most people, unlimited coverage provides the best protection. The premium savings from reduced coverage may not be worth the risk of being personally responsible for medical bills exceeding your policy limits.
Should I Opt Out If I Have Medicare?
This is extremely risky. Medicare does NOT cover:
- Transportation to medical appointments
- Attendant/custodial care
- Vehicle modifications for disabilities
- Household services you can no longer perform
- Lost wages
While you may save money on premiums, the financial risk if you’re seriously injured in an accident could be devastating.
Can I Change My PIP Coverage After an Accident?
No. You’re locked into whatever coverage you had at the time of the accident. This is why it’s critical to carefully consider your coverage choices before you need them.
What Should I Do Before an Accident Happens?
Be proactive about your auto insurance coverage:
- Review your PIP coverage level carefully. Understand that choosing limited coverage could leave you personally responsible for medical bills exceeding your policy limit.
- Consider keeping unlimited PIP coverage if:
- You don’t have comprehensive health insurance
- Your health insurance doesn’t cover auto accidents
- You have dependents who rely on you
- You engage in activities with higher accident risk
- Purchase high bodily injury liability limits – At least $250,000/$500,000, or preferably $500,000/$1,000,000. Remember, you can now be held personally liable for medical expenses you cause others to incur.
- Purchase adequate UM/UIM coverage – At minimum, equal to your bodily injury liability limits.
- Understand your health insurance policy:
- Does it cover auto accident injuries?
- Will it pay primary or secondary to auto insurance?
- What are your deductibles and out-of-pocket maximums?
- Keep your vehicle insured at all times. Driving without insurance is a misdemeanor in Michigan punishable by fines, jail time, and license suspension.
Why You Need an Experienced Attorney
The 2019 reforms made Michigan auto accident cases significantly more complex. Issues attorneys now regularly handle include:
- Determining which insurance policy provides coverage when multiple policies exist
- Fighting insurance companies that deny benefits based on coverage limitations
- Pursuing at-fault drivers personally when their insurance is insufficient
- Navigating coordination of benefits between auto insurance and health insurance
- Ensuring clients with reduced PIP coverage receive maximum benefits under their policy limits
- Challenging insurance company interpretations of the reformed law
- Recovering compensation for medical expenses that exceed PIP limits
- Maximizing UM/UIM claims when at-fault drivers are uninsured or underinsured
If you’ve been injured in an auto accident, it’s essential to work with an attorney who understands both the old and new Michigan no-fault systems and can maximize your recovery under current law.