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How Much Car Insurance Do I Need In Michigan?

car insurance Michigan

Key Points of This Article:

  • On July 2, 2020, car insurance policyholders will be able to purchase limited and possibly risky coverage under the passage of Michigan’s no-fault auto insurance reform.
  • Under the new law, if you cause an accident, or a family member or friend borrows your car and causes a bad crash, the medical bills that result could become your responsibility. 
  • The extent to which no-fault covers a victim’s medical expenses will depend on and be limited by the coverage level that applies to the victim’s claim.
  • Once the injured person exhausts their own medical coverage, the injured person can turn to the negligent driver and vehicle owner for payment of the excess medical bills.

With Michigan’s Changes in No-Fault Policies, Do You Know How Much Car Insurance to Buy?

Adding to the headache of an already confusing process, car insurance coverage options are going to look a little different and much more complex for Michigan drivers and motor vehicle owners come July 2, 2020. At that time, policyholders can purchase limited personal injury protection benefits (PIP benefits or no-fault insurance benefits) under the passage of Michigan’s new no-fault law. This means negligent drivers who cause injuries and damage to others will be held accountable for an accident victim’s pain and suffering after satisfying the new definition of a serious impairment of body function, but also any related medical expenses. The financial exposure every Michigan car owner and driver now faces will be immense, and everyone should be adequately protected. 

The magnitude to which no-fault covers a victim’s medical expenses will depend on and be limited by the coverage level that applies to the victim’s claim. Coverage levels that will be available in auto insurance policies issued or renewed after July 1, 2020, include:

  • $250,000 PIP coverage;
  • $500,000 PIP coverage;
  • Unlimited PIP coverage;
  • $50,000 PIP coverage – for Medicaid beneficiaries whose family members live in the same household and have qualified coverage or are covered by another auto policy;
  • No PIP coverage for proper Medicare beneficiaries or individuals whose private health insurance pays for all auto accident-related treatment.

Under the new Michigan accident law, negligent drivers will be at the mercy of the no-fault coverage the person they injured maintained. Once the injured person exhausts their own medical PIP coverage, whether it is $50,000 or $250,000, the injured person can turn to the negligent driver and vehicle owner for payment of the excess medical bills.

For the past 45 years, Michigan has been a no-fault state. This means your auto insurance pays for specified benefits, even if you were at-fault for causing the accident. The auto insurance carrier, whether it is State Farm Progressive or Geico, acts as a health insurer and has had to pay for all medical, rehabilitation, and treatment costs related to the crash. On the flip side, the at-fault driver’s insurance carrier has only been responsible for paying compensation for pain and suffering, disfigurement, emotional distress, and other non-economic damages with bodily injury (BI) coverage.

How Much Does Car Accident Medical Treatment and Recovery Cost?

Throughout the U.S., including here in Michigan, medical expenses continue to soar and can quickly add up to astronomical sums and create unfathomable financial strains on families. For example, if you require a hospital stay due to a concussion caused by a car accident, this is the base rate for the charges associated with treatment at these Michigan hospitals (as required to be published on hospital websites until the beginning of this year by the Centers for Medicare & Medicaid Services).

  • McLaren Bay Region, Bay City: $10,646
  • Covenant HealthCare, Saginaw: $13,473
  • McLaren, Flint: $15,840
  • Spectrum Health Butterworth, Grand Rapids: $19,923
  • Michigan Medicine, Ann Arbor: $22,977
  • Henry Ford Allegiance, Jackson: $24,431

Back and spinal injury treatment costs look even scarier. Here’s a look at the base listed price for a spinal fusion procedure.

  • Bronson Methodist Hospital, Kalamazoo: $85,755
  • Spectrum Health Butterworth, Grand Rapids: $87,807
  • Mercy Health Saint Mary’s, Grand Rapids: $91,689
  • McLaren Flint: $92,510
  • McLaren Bay Region, Bay City: $93,852
  • Metro Health, Grand Rapids: $105,774
  • Henry Ford Allegiance, Jackson: $115,123
  • Michigan Medicine, Ann Arbor: $135,447

A three-day hospital stay can run into the tens of thousands of dollars. You throw in intensive care or life-saving procedures, and the bills run into the six-figures, but repeat doctors’ visits, urgent and emergent care stops, and rehabilitation can quickly add up as well. Currently, PIP pays for these vast expenses, making the implication of these new limited insurance policies an enormous risk.

New No-Fault Law Impacts Owners’ Liability and Forces Accident Responsibility on Vehicle Owner

Owners’ Liability will now extend far beyond what most people think and force the coverage of accident expenses on vehicle owners. Under the Owners’ Liability Statute, MCL 257.401, the owners of the vehicle at-fault for causing a car wreck are strictly liable for the damages the negligent driver using their car caused. It doesn’t just stop at individuals listed on an insurance policy or family members either. Under the constructive use doctrine, a vehicle owner is also financially responsible for all injuries caused by a vehicle operated by any person the owner allows.

Example: If your teenage son is given permission to drive the family car, but gives the keys to his friend who decides to run a red light and causes a bad wreck including substantial injuries to pedestrians at a crosswalk, it is you who will be left responsible.

Given this dramatic change in the Michigan no-fault law, it is imperative to purchase as much liability insurance as you can to protect yourself and your financial interests, including coverage of any real assets.

Cheap Policies May Leave You Unprotected

As July 2020 approaches, the Michigan car accident lawyers from the Law Offices of Lee Steinberg, P.C. recommend you contact your insurance agent and ask about all of your policyholder options. Avoid going with a cheap policy, and find an agent that is working to support you in the chance of a car wreck changing your life. This could mean purchasing a default minimum, with at least $250,000/$500,000 coverage. And, if you have any significant assets, be sure to buy enough insurance to cover those. Those assets may include:

  • homes with equity
  • savings accounts
  • retirement plans including pensions, IRA accounts, and stock accounts

Another significant change to the law to be aware of includes an increase in the mandatory state minimums for bodily injury coverage. Currently, Michigan’s minimum is $20,000 per person and $40,000 per occurrence. Beginning in July 2020, the state minimum will increase to $50,000 per person and $100,000 per occurrence. However, the default amount will be much higher – set at $250,000 per person and $500,000 per occurrence.

Get your copy of the new MICHIGAN CHOICE OF BODILY INJURY LIABILITY COVERAGE LIMITS Form here

The cost of bodily injury coverage is not expensive. The difference between $250,000/$500,000 in coverage and $1,000,000 is a minimal amount. Be sure to discuss all of these changes, options, and what they mean to you and your family with your insurance agent.

Questions About Michigan No-Fault Law?

The Michigan auto accident attorneys at the Law Offices of Lee Steinberg, P.C. has helped families obtain millions in car accident injury claims, including no-fault benefits. Feel free to give us a call if you have questions about the new Michigan no-fault law, the new insurance policies that will be sold, or any other questions about Michigan car crash injury law. The call to 1-800-LEE-FREE (1-800-533-3733) is free, and there is no fee until we win your case.

Also read: New Michigan No-Fault Law Passes – What You Need to Know