Understanding Michigan’s 2019 No-Fault Reform
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 and 2021 fundamentally changed
how Michigan drivers purchase auto insurance and how accident victims receive benefits. The Law Offices of Henry M. Hanflik has over 50 years of experience navigating Michigan’s no-fault system. Our attorneys stay current with all legal changes to ensure our clients receive every benefit they’re entitled to under the new law.
The Biggest Changes You Need to Know
1. PIP Coverage Is No Longer Unlimited for Everyone
OLD LAW: All Michigan drivers were required to carry unlimited lifetime medical coverage (Personal Injury Protection or PIP).
NEW LAW: Drivers now choose from multiple PIP coverage levels:
- 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
- However, if you are on a motorcycle or are a pedestrian, your rights could vary.
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.
2. Higher Bodily Injury Liability Requirements
OLD LAW: Minimum coverage of $20,000 per person/ $40,000 per accident
NEW LAW: New standard minimums are $250,000 per person / $500,000 per accident (though drivers can elect reduced limits of $50,000/$100,000)
Why This Matters: 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.
3. Home or Attendant Care Benefits (Taking Care of Your Personal Needs) Are Now Limited
OLD LAW: Unlimited payment for family-provided in-home attendant care
NEW LAW (effective July 1, 2021 ): Family or friend-provided in-home attendant care is limited to 56 hours per week. But if you were injured before the effective date, you may not be limited to 56 hours per week for family or friend-provided care.
Exception: Commercial agency care and residential facility care remain unlimited for those with unlimited PIP coverage, even after the effective date of the new law.
4. Medical Fee Schedules
The new law caps what healthcare providers can charge for auto accident-related treatment at a percentage of Medicare rates. V\/hile 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.
II. FREQUENTLY ASKED QUESTIONS
How These Changes Affect Accident Victims
Q: If I was injured BEFORE July 1, 2020, do these changes affect me?
A: No. 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. The 2019 reforms only apply to accidents occurring on or after July 1, 2020.
Q: If I was injured AFTER July 1, 2020, what benefits am I entitled to?
A: Your benefits depend on what Pl P 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 $7201 per month for up to 3 years ($20 per day)
• Replacement services (household tasks you can no longer perform) for up to 3 years (Rate as of 10/01/2025)
• Attendant care (up to 56 hours/week for family or friend-provided care; unlimited for commercial agency care)
• Mileage reimbursement for medical appointments or medical-related driving
• 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.
Q: Under Michigan’s no-fault system, does my insurance company pay my lost wages?
A: Yes, but within limits.
Your no-fault insurance will pay up to 85% of your lost wages, subject to a monthly maximum of $7201 per 30-day period (this amount is adjusted annually each October 1st), and is not
subject to taxes.
Important limitations:
• Wage loss benefits last for a maximum of 3 years from the date of the accident • Benefits may be reduced if you receive workers’ compensation or Social Security
disability benefits
• You must provide medical documentation that you are unable to work due to your injuries
Q: How long am I entitled to receive no-fault benefits?
A: 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 ($50,000/$250,000/$500,000): 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 Pl P coverage level
Attendant Care:
• Unlimited PIP coverage: Lifetime benefits (subject to 56-hour weekly limit for family or
friend-provided care)
• Limited PIP coverage: Until you reach your policy limit
• No PIP coverage: No attendant care benefits
Q: I was seriously injured in a crash that wasn’t my fault. Can I sue the at-fault driver?
A: Under Michigan law, you can sue the at-fault driver for excess economic damages and for non-economic damages (pain and suffering) only if you meet the legal “threshold” for serious injury. You must prove:
1. Death, permanent serious disfigurement, OR serious impairment of body function For “serious impairment of body function,” Michigan courts require:
objectively manifested injury (medically identifiable with physical basis)
• That affects an important bodily function
• That impacts your general ability to lead an your normal life (more than a minor interruption)
NEW UNDER THE REFORMED LAW
You may also 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, or have assets which are collectible.
Q: What if the driver who hit me doesn’t have insurance or doesn’t have enough insurance?
A: This is why Uninsured Motorist (UM) and Underinsured Motorist (UIM) coverage is now more critical than ever under Michigan’s reformed no-fault law.
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
We strongly recommend purchasing UM/UIM coverage equal to or greater than your bodily injury liability limits.
If you don’t have adequate UM/UIM coverage and the at-fault driver is uninsured or underinsured, you may be unable to fully recover for your injuries.
Q: Should I keep unlimited PIP coverage?
A: 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 coverage.
Q: I have Medicare. Should I opt out of PIP coverage?
A: 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
• Lostwages
Opting o~t could leave you without coverage for these critical services. While you may save money on premiums, the financial risk if you’re seriously injured in an accident could be
devastating.
Q: Can I change my PIP coverage level after an accident?
A: 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.
Ill. General Auto Accident Information
Michigan’s Reformed “No-Fault” System: What You Need to Know
Michigan’s auto insurance system separates your claim into two categories:
Category 1: First-Party No-Fault Benefits {From Your own Insurance)
These benefits are paid by your own insurance company (or your employer’s insurance) regardless of fault:
• Medical expenses – Coverage depends on your Pl P level choice
• Wage loss – Up to $7201 /month for up to 3 years
• Replacement services – For household tasks you can no longer perform, up to 3 years
• Attendant care – For personal care assistance (limited to 56 hours/week for family care)
• Mileage reimbursement – For travel to medical appointments or medically-related
travel
• Other expenses – Such as vehicle/home modifications if needed
Key Point: The amount and duration of these benefits now depend on what PIP coverage level you selected when you purchased your policy.
Category 2: Third-Party Claims (Against the At-Fault Driver)
If someone else caused your accident, you may sue them for:
Non-Economic Damages (Pain & Suffering):
• Only available if you meet the “serious injury threshold”
• Must prove death, permanent serious disfigurement, or serious impairment of body
function
Economic Damages (Medical Bills & Lost Wages):
• NEW: You can now recover medical expenses that exceed your PIP coverage limits
• You can recover excess wage loss and wages beyond the 3-year no-fault limit
• Limited by the at-fault driver’s bodily injury liability coverage, or the driver’s collectible assets
Important
If the at-fault driver doesn’t have adequate insurance, your recovery may be limited unless you have UM/UIM coverage.
IV. What To Do Before An Injury Or Claim Occurs
Be proactive about your auto insurance coverage:
1. Review your PIP coverage level carefully. Understand that choosing limited coverage could leave you personally responsible for medical bills exceeding your policy limit.
2. 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
3. Purchase high bodily injury liability limits -At least $250,000/$500,000, or preferably $500,000/$1,000,000 or even more. Remember, you can now be held personally liable for medical expenses you cause others to incur.
4. Purchase adequate UM/UIM coverage-At minimum, equal to your bodily injury liability limits.
5. 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?
6. Keep your vehicle insured at all times. Driving without insurance is a misdemeanor in Michigan punishable by fines, jail time, and license suspension, and may impact your
rights.
7. Meet with an experienced auto accident attorney to review whether your coverage is adequate for your situation.
The Law Offices of Henry M. Hanflik offers free consultations to review your insurance coverage and help you understand your options. Call us at 810-720-4000