No-Fault PIP Exclusions Under Michigan Law (2026 Guide)

If you live in Michigan, your choice about Personal Injury Protection (PIP) medical coverage is one of the most important financial and legal decisions you'll ever make.

Since Michigan's auto insurance reform, drivers can now select among 6 different PIP medical coverage levels, including options that exclude PIP medical coverage for some or all household members. Those exclusions can leave you or your family with little or no coverage after a serious crash.

The Lee Steinberg Law Firm has handled Michigan no-fault and PIP cases for more than 50 years and has recovered over $1 billion for injured clients across the state. We see every day how PIP exclusions, low limits, and confusing forms hurt people after a crash.

If you have questions about PIP or your coverage, you can call 1-800-LEE-FREE for a free consultation. You pay nothing unless we win your case.

1. Quick Background: How Michigan No-Fault And PIP Work After Reform

Michigan is still a no-fault state. That means your own auto policy generally pays your medical expenses and certain other benefits after a crash, regardless of who caused it. Those benefits are called Personal Injury Protection (PIP).

Under the 2019 reform (effective July 2, 2020), drivers no longer have to buy unlimited lifetime PIP medical benefits. Instead, you choose a PIP medical coverage level, the maximum your auto insurer will pay for medical expenses per person, per accident.

According to the Michigan Department of Insurance and Financial Services (DIFS), the six PIP medical coverage options are:

• Unlimited PIP medical coverage
• Up to $500,000 in PIP medical coverage
• Up to $250,000 in PIP medical coverage
• Up to $250,000 with PIP medical exclusion(s) for certain people in the household
• Up to $50,000 in PIP medical coverage (available only if the named insured is enrolled in Medicaid and all other household members have qualifying coverage)
• PIP medical opt-out (no PIP medical coverage) 

If you do not make a valid PIP medical choice, the default in Michigan is unlimited PIP medical coverage.

It's also critical to understand that PIP includes more than medical bills. Even if you exclude or opt out of PIP medical, other PIP benefits, like wage loss, replacement services, and some funeral/burial expenses, remain part of your policy.

2. PIP Choice Vs PIP Exclusion Under Michigan's New Law

Drivers now face two different sets of decisions:

• PIP medical coverage level ("PIP choice") – You pick one of the six levels above.
• PIP medical exclusions – Certain household members can be excluded from PIP medical coverage entirely if they have other qualifying health coverage.

PIP Choice:
Your PIP medical level is simply the dollar cap on what your auto insurer will pay in medical bills for each injured person covered under that policy. That cap is separate from wage loss and replacement services, which are not part of your PIP medical case.

PIP Exclusion:
PIP exclusions come in two main flavors under today's law:

• Policy-level PIP medical exclusions – For example, under the $250,000 with exclusions option, a named insured or household relative with qualifying health coverage can be left entirely out of PIP medical benefits.
• Statutory no-fault PIP exclusions – Separate from your coverage selections, Michigan law says certain people simply cannot collect PIP at all (for example, the uninsured owner of a vehicle involved in the crash, or someone joyriding in a stolen car).

This article focuses first on policy-level PIP medical exclusions tied to health insurance, then explains the separate statutory exclusion rules later.

3. Can I Exclude PIP Coverage On My Michigan Auto Insurance?

The short answer is in limited situations, yes. But only for PIP medical coverage and only if strict legal requirements are met.

Under Michigan's current no-fault law:

• You may choose $250,000 with PIP medical exclusions (Option 4) and exclude the named insured and/or specific household relatives if each excluded person has private health coverage that will pay for auto accident injuries or their own PIP policies.
• You may choose $50,000 PIP medical coverage (Option 5) only if the named insured is on Medicaid and every other household member has another auto policy, Medicaid, or health insurance that covers auto accident injuries.
• You may choose the PIP medical opt-out (Option 6) only if the named insured has Qualified Health Coverage (QHC). A person has QHC in one of two ways: (1) they have Medicare Parts A and B, or (2) they have private health insurance that does not exclude or limit coverage for injuries related to motor vehicle accidents and has a deductible that is approximately $6,000 or less. MCL 500.3107d.

You cannot simply "drop PIP" because you want a cheaper premium. The law requires:

1. A completed, signed PIP medical selection form; and
2. Proof of Medicare, Medicaid, or QHC for the specific option you are choosing.

Insurers must collect both the form and proof at every renewal if you are using QHC, Medicare, or Medicaid to opt-out or exclude PIP medical coverage.

4. PIP Exclusion Requirements For Seniors And People On Medicare

Many seniors are being told they can "save money" by opting out of PIP medical because they have Medicare. If you use this option, no one covered by that policy has PIP medical coverage at all. You will rely entirely on Medicare (and any Medigap or Medicare Advantage plan) for crash-related medical bills.

Risks Specific To Medicare Recipients

• Medicare is secondary payer when other coverage (like PIP) exists, but becomes primary only after you legally opt out of PIP medical.
• Medicare and most Medigap plans limit or exclude long-term attendant care, in-home nursing, and some rehabilitation services that PIP often covers.
• If a household member loses their QHC or Medicare, you may need to change your PIP selection within 30 days to avoid a dangerous coverage gap.
• If there is a settlement on the negligence case, Medicare can assert a lien and claw back money out of the negligence settlement money. 

For many seniors, especially those on fixed incomes or with existing health problems, opting out of PIP can be a very risky move.

5. Does My Health Insurance Qualify For A Michigan PIP Opt-Out (Qualified Health Coverage)?

To exclude yourself or a family member from PIP medical, or to use the Medicare opt-out, your health plan must often meet the legal definition of Qualified Health Coverage (QHC).

Under Michigan law and DIFS guidance, QHC means either:

• Medicare Parts A and B (including some Medicare Advantage/Medigap plans); or
• A health insurance policy that:
• • Does not exclude or limit coverage for auto accident injuries, and
  • Has an individual annual deductible at or below a maximum amount that DIFS adjusts each year (for example, $6,579 in recent years).

It is important to understand that Medicaid, VA coverage, accident-only plans, and limited-benefit plans are not QHC. In fact, the state of Michigan specifically states that VA coverage cannot be used to exclude or opt out of PIP medical coverage.

How To Verify Your Plan Is QHC

DIFS advises that health insurers should provide documentation confirming whether a plan meets QHC requirements so that auto insurers can rely on it. Here are some practical steps to take:

1. Call your health insurer and ask if your plan qualifies as "Qualified Health Coverage" under Michigan's auto law.
2. Request a QHC letter stating that the policy doesn't limit or exclude auto accident injuries, and that the per-person deductible is at or below the current QHC maximum.
3. Provide this QHC letter to your auto insurer each renewal if you are using QHC to opt out or exclude PIP medical coverage.

If the health plan isn't clearly QHC, you should assume it is not until you get written confirmation.

6. How PIP Exclusions Affect Your Spouse, Kids, And Other Household Members

Michigan's law ties PIP benefits to the named insured and household relatives, not just to the person listed as a driver on the policy. That's why exclusions can have serious ripple effects.

Option 4 – $250,000 With PIP Medical Exclusions

Under Option 4, you can keep $250,000 in PIP medical coverage for some household members and exclude others who have QHC.

Key impacts:

• Excluded members receive no PIP medical benefits at all from that policy. Their medical bills must go through their QHC or other available coverage.
• Non-excluded household members (for example, your children) are still capped at $250,000 in PIP medical per person, per crash.

Option 5 – $50,000 With Medicaid

If you select the $50,000 PIP medical option, it's only allowed if the named insured has Medicaid and every other household member has another auto policy, Medicaid, or health insurance that will cover auto accident injuries.

This option exposes your entire household to the risk that $50,000 of PIP medical can be exhausted very quickly in a serious crash, especially with hospitalizations, surgery, and rehab.

Losing QHC Or Changing Health Plans

DIFS warns that if someone in your household does not have PIP medical coverage and later loses their QHC, you may have no medical coverage at all for that person in an auto accident unless you change your PIP selection within 30 days.

If you're not sure how your choice affects family members, talk to a Michigan no-fault attorney before you sign or renew.

7. Legal Risks Of Excluding PIP Coverage In Michigan

No PIP Medical Benefits For Excluded People

Anyone who is excluded from PIP medical (or covered by a full PIP medical opt-out) gets zero PIP medical dollars from that policy. DIFS' official guidance is clear: excluded members "will have no PIP medical coverage under the policy."

Their only options for medical bills may be their health insurance, the at-fault driver's bodily injury liability coverage (if they meet Michigan's serious-impairment threshold), or their own uninsured/underinsured motorist coverage.

Health plans often restrict or deny physical therapy, chiropractic treatment, long-term in-home care, certain rehab therapies, and home or vehicle modifications. PIP medical covers these categories much more broadly than health insurance.

You Could Be Left With No Coverage After A Health-Plan Change

If you opt out or exclude PIP medical based on QHC and then lose that health insurance, switch to a plan that doesn't qualify as QHC, or experience a gap in coverage, DIFS says you must get new qualifying coverage or make a new PIP selection within 30 days. If you don't, you may have no medical coverage at all after a crash.

On top of that, someone who has opted out of PIP medical under Section 500.3107d is generally not eligible for Michigan Assigned Claims Plan PIP benefits for accidents that occur after that 30-day window.

Out-of-Pocket Liability For Medical Costs

Michigan's no-fault system still limits lawsuits against other drivers. You can sue only if you meet one of the three threshold injuries: (1) "serious impairment of body function," (2) permanent serious disfigurement, or (3) death. The at-fault driver's insurance is limited to whatever bodily-injury limits they purchased.

Although default bodily-injury limits are now $250,000 per person/$500,000 per accident, drivers can sign down to as low as $50,000/$100,000 under MCL 500.3009.

If your medical bills exceed your PIP medical limit (or you excluded PIP medical entirely) and the at-fault driver's liability limits, you may be personally responsible for the remaining bills.

Step-Down Provisions Can Shrink What Family Members Can Recover

Some Michigan auto policies contain "family step-down" provisions that reduce bodily-injury liability coverage to the state minimum when an injured person sues a family member under the same policy.

Courts have upheld step-down clauses that slash liability limits for injured family members, even when the family thought they purchased high limits.

If you exclude or opt out of PIP medical and have a policy with a step-down clause, your own family could be limited to the bare minimum liability coverage in a lawsuit, even after a catastrophic injury.

8. What Happens If I'm Injured In A Car Accident With A PIP Exclusion And No Health Insurance?

This is the nightmare scenario, and we are seeing it more often since the reform. Consider these common situations:

• You opted out of PIP medical using QHC, then lost job-based health insurance coverage and didn't update your auto policy within 30 days.
• You excluded yourself under the $250,000 with exclusions option based on a health plan that never truly qualified as QHC.

If you're injured in a crash and have no valid PIP medical coverage and no health insurance:

• Your auto insurer will typically deny PIP medical benefits, pointing to your exclusion or opt-out.
• You are generally not eligible for Michigan Assigned Claims Plan PIP benefits if you opted out under Section 3107d.
• Your immediate options may be limited to hospital charity care or payment plans, waiting for a settlement with the at-fault driver, and/or using your own uninsured/underinsured motorist coverage, if you purchased it.

In other words, you may be "on the hook" for tens or hundreds of thousands of dollars in medical bills after your crash, with no guarantee that a lawsuit will make you whole.

If this is your situation, you should speak to a Michigan no-fault and PIP lawyer immediately. There may be arguments about whether your exclusion was valid, whether your health plan actually met QHC requirements, or whether another policy in the order of priority must step in.

9. PIP Exclusion Vs Coordination Of Benefits: Health Insurance Primary Vs Secondary

A lot of Michigan drivers confuse PIP exclusion with coordinated (excess) PIP. They are very different.

Coordinated Excess PIP

With coordinated or excess PIP medical coverage, your health insurance pays first for crash-related medical bills. The PIP medical coverage pays second, covering eligible expenses your health plan doesn't pay, up to your PIP limit. You still have PIP medical coverage, you just receive a premium discount for making health insurance primary.

PIP Medical Exclusion / Opt-Out

With a PIP medical exclusion (Option 4) or full opt-out (Option 6), the excluded person has no PIP medical coverage at all under that policy. Their health insurance is not just primary, it's the only coverage (aside from possible lawsuits or other policies in the priority chain). If you want to save some premium but still keep the safety net of PIP medical, coordinated PIP is usually safer than excluding PIP entirely.

10. Statutory PIP Exclusions: When The Law Bars PIP Benefits Completely

Separate from your coverage selections, Michigan's no-fault statute says certain people are never entitled to PIP benefits if specific conditions exist at the time of the accident, even if the policy otherwise has PIP coverage.

Under MCL 500.3113, a person is not entitled to PIP if, at the time of the crash:

• They were willingly using a vehicle that was taken unlawfully and knew or should have known it was taken unlawfully.
• They were the owner or registrant of a vehicle involved in the crash and that vehicle did not have the required no-fault insurance.
• They were not a Michigan resident and did not own a Michigan-registered and insured vehicle.
• They were driving as a named excluded operator under a policy exclusion authorized by MCL 500.3009(2).
• They were the owner or operator of a vehicle for which coverage was excluded under a policy exclusion authorized by statute.

These statutory exclusions often surprise people. For example, the uninsured owner of a vehicle in the crash is barred from PIP benefits, even if someone else's policy would otherwise be in the order of priority.

11. Michigan PIP Exclusion Forms And Documentation Requirements

Every Michigan auto insurer must use a state-approved PIP medical selection form to record your coverage choices. Key documentation rules:

• When you choose Options 4, 5, or 6 (exclusions, $50k Medicaid, or opt-out), your insurer must collect a completed and signed PIP selection form, plus proof of Medicaid, Medicare A & B, or QHC for all people whose coverage depends on those programs.
• Insurers are instructed to gather this documentation not just once, but at every renewal for customers relying on QHC, Medicare, or Medicaid to support their PIP medical selection.

Practical tip: Keep copies of every PIP selection form, QHC letter, Medicare/Medicaid card, and dec page in a safe place. If you're injured later, bring them to your attorney; they are often crucial evidence in coverage disputes.

12. How To File A Claim If PIP Coverage Was Excluded Or Denied

If you're hurt in a Michigan crash and your PIP medical coverage was excluded, limited, or your insurer is denying benefits, here's what to do:

1. Get emergency medical care first. Tell providers about all your insurance: auto, health, Medicare/Medicaid.
2. Notify your auto insurer in writing as soon as possible that you were injured and are making a no-fault claim.
3. Request the basis for any denial in writing. DIFS and industry practice require written denials; verbal "no" is not enough.
4. Pull your paperwork: PIP medical selection forms, QHC letters, health insurance cards, policy declarations page, and any endorsements.
5. Check for other potential PIP sources in the order of priority (for example, another auto policy in the household or a vehicle owner's policy if you were a passenger).
6. Talk to a Michigan no-fault lawyer quickly. Short deadlines apply to PIP and third-party claims, and coverage disputes are fact-intensive.

DIFS also allows you to file a consumer complaint against an insurer that wrongfully denies or delays payment. An attorney can help you decide whether to complain to DIFS, sue the insurer, or both.

14. FAQs About Michigan PIP Exclusions And Opt-Outs

Can I exclude PIP coverage on my Michigan auto insurance?
You can exclude PIP medical coverage only in specific circumstances (Options 4, 5, and 6) and only if you provide proof of QHC, Medicaid, or Medicare for yourself and affected household members. You cannot legally drive a car in Michigan with no PIP medical coverage unless you qualify for and properly elect one of these options.

What are the PIP exclusion requirements for seniors on Medicare?
Seniors (or anyone) on Medicare Parts A & B can use Option 6 (PIP medical opt-out) only if all resident relatives and spouse also have QHC or PIP coverage under another Michigan auto policy. If that condition isn't met, you cannot legally opt out of PIP medical.

Does my health insurance qualify me to opt out?
Your plan qualifies only if it meets the QHC definition: no exclusion or limitation of auto-injury claims and an individual deductible at or below the DIFS-set maximum. Medicaid, VA coverage, health-sharing ministries, and many limited-benefit or accident-only policies do not qualify.

If I exclude PIP and then lose my health insurance, what happens?
DIFS warns that you have 30 days to either obtain new QHC or change your PIP medical selection. If you don't, you may have no coverage for auto accident medical bills, and you may not be eligible for Assigned Claims PIP benefits.

Is excluding PIP the same as coordinating benefits?
No. Coordinated PIP means health insurance is primary and PIP is secondary, but PIP still exists as a backup. A PIP exclusion or opt-out means no PIP medical coverage at all for the excluded person.

15. When To Call A Michigan No-Fault And PIP Lawyer

You should contact an experienced Michigan auto accident lawyer immediately if:

• You were hurt in a crash and your PIP claim was denied or limited because of an exclusion, opt-out, or alleged statutory bar.
• You discover that a family member was excluded from PIP or that your coverage level is lower than you thought.
• You are being pressured by an agent or insurer to opt out of PIP medical or choose a low PIP limit to "save money," especially if you are on Medicare or Medicaid.
• You simply want a second opinion on whether your current coverage actually protects your family, including whether a health insurance lien could eat into any settlement.

The Lee Steinberg Law Firm has more than 50 years of experience with Michigan's no-fault law and a 99% success rate recovering compensation for injured clients. We handle PIP and no-fault benefit claims, insurance coverage and priority disputes, and third-party lawsuits for pain and suffering and excess medical bills. You should also know how recent decisions like Andary v. USAA have shaped what insurers can and can't do with PIP benefits.

You pay no upfront fees and nothing unless we win: The "Lee Free Guarantee."

Free Case Review

If you have questions about PIP exclusions or were injured in a crash:

• Call 1-800-LEE-FREE (1-800-533-3733), or
• Request a free case evaluation online at the firm's contact page.

You don't have to navigate Michigan's complex no-fault and PIP rules alone. An experienced attorney can review your policy, forms, and medical situation and fight to protect your rights.