Changes to Michigan Car Insurance

May 14, 2020

There are changes coming your way if you are a Michigan driver. In July 2020, new rules go into effect that will have an impact on your car insurance choices. Here is a quick preview of what to expect.

Why Are Changes Being Made?

Michigan has some of the highest car insurance rates in the country. The changes in the law are an attempt to cut costs and lower the car insurance rates in the state.

What’s Changing?

Personal Injury Protection options. Instead of mandatory unlimited medical expense coverage, you will have options to have a lower coverage amount. This covers costs YOU incur in an accident (not the other car).

Required Liability Coverage increase. Since PIP coverage will be offered at lower amounts, there is an increased likelihood of lawsuits to cover healthcare expenses resulting from an accident. If you hit someone and their PIP coverage does not cover all their medical expenses, the person can sue you for those excess expenses. Liability coverage will default at 250,000 per person / $500,000 per accident, but you have an option to take a lower amount down to $50,000/$100,000.

Insurance premiums should drop across the board, but exact details will vary by insurance company.

What’s Not Changing?

Michigan will still be a no-fault state. This means your own insurance covers your expenses – in case of an accident you get to work with the insurance company you choose, instead of dealing with the “at-fault” party’s insurance company.

What Should I Do?

You should review the options available to you as the changes take effect in July.

With the increased chance of lawsuits, make sure you have adequate liability coverage. Talk to your insurance agent about an Umbrella Policy if you do not currently have one.

If you have further questions about these changes, or other personal finance topics, contact our office. We are happy to help you review your situation!

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