When you purchase auto insurance in Michigan, you are purchasing a no-fault policy. Michigan is a no-fault state, meaning you are entitled to certain benefits when involved in a motor vehicle accident, even if you are at-fault for causing the accident.
One of the main no-fault benefits a car accident victim is entitled to is medical expenses. Under the law, the auto insurance carrier is responsible for paying the medical expenses incurred due to the car, truck or motorcycle accident. However, how the medical benefit works is affected by the type of no-fault policy in effect at the time of the accident.
There are two different types of medical benefit policies – coordinated medical and uncoordinated medical. Coordinated medical is also known as excess medical. Most individuals have a coordinated no-fault policy. The reason is simple – they’re cheaper. They’re cheaper because the auto no-fault policy is coordinated with the individual’s health insurance policy. This means you must use your health insurance (HMO, PPO or HSA) first for a product or service before the auto insurance company pays. In other words, health insurance is primary while the auto insurance is secondary.
Like always, the car insurance company is responsible for paying for medical care that is not otherwise covered by the health insurance company. For example, the auto insurance company will have to pay out of pocket costs, deductibles, doctor visits or medical tests not otherwise covered by health insurance.
With a coordinated policy, the auto insurance company will require all medical bills be submitted to the health insurance company first. The health insurer will then have to reject the bill or make a partial payment under its contract before the auto insurance company will pick up and pay the remaining bill.
An important thing to consider with coordinated no-fault policies is there is usually a deductible. This means a deductible will have to be paid first before the auto insurance company pays any medical benefits.
In addition, if a person has a coordinated no-fault policy, but does not have health insurance, that person will also have to pay a deductible. Under some policies, the is an additional charge on top of the deductible that must be met before medical benefits are extended.
The differences between coordinated medical policies and uncoordinated policies under the Michigan No-Fault Law are important. I hope this brief overview is helpful.