Very often in cases we handle, the difference between a coordinated Michigan no-fault policy and an uncoordinated Michigan no-fault policy affects the outcome of a case.
You may not know this, but when purchasing a car insurance policy in Michigan you can select to purchase either a coordinated policy or an uncoordinated policy. Under Michigan law, by choosing a coordinated policy, in return for a reduction in the insurance premium the buyer has chosen to have their own health insurer or disability insurer act as the primary payor for medical treatment after a car accident. This means your health insurance company pays first, with the car insurance company only paying for those benefits not paid by the private health insurer.
If a policyholder has chosen an uncoordinated policy, the auto insurance company will usually be primary and forced to pay for auto-related medical treatment instead of a private health insurer.
Most people have coordinated Michigan no-fault policies. There are estimates that in fact 95% of all Michigan car policies are coordinated. The reason for this is simple. They tend to be cheaper. Unsurprisingly, in their quest to close a deal auto insurance agents only offer coordinated policies to their customers.
However, this can be dangerous. First, the difference in cost between an uncoordinated policy and a coordinated policy often is very little.
In addition, there are many benefits to purchasing an uncoordinated policy. First, if your private insurer is an HMO or some type of medical plan that mandates you stay in-network and you have a coordinated no-fault policy, you must stay in-network when selecting various doctors. Otherwise your private health insurer as well as the auto insurer can deny payment of your medical bills.
Another benefit can be the efficient payment of medical bills. With an uncoordinated policy, the auto insurer understands that in most situations, it will be responsible for the payment of auto-related medical treatment. This can speed up the medical payment process and therefore not impede the treatment for an auto accident victim.
A further benefit is less paperwork. There tends to be less paperwork and documentation needed to verify payment by the auto carrier when the policy is uncoordinated. This again can lead to a easier and faster medical treatment after a devastating Michigan car accident.
Next time you re-up for your auto insurance, ask your agent about purchasing an uncoordinated policy.