Auto insurance is always changing in Detroit and Michigan. When buying car insurance in Michigan, there are more options than ever before. And with those options comes confusion and difficult choices. There is always a battle between saving money but providing adequate protection for you and your family. But there are important things to know and consider. Not all auto insurance is the same.
The following are six key things to know about when shopping for Detroit and Michigan car insurance in 2022.
#1 – There are Now Multiple PIP Coverage Options:
There are now multiple choices in the amount of PIP coverage you can purchase. In its most basic form, PIP coverage, or personal injury protection, is medical coverage for you and a family member who lives with you when a car crash occurs. PIP coverage will cover hospital bills, doctors’ bills, physical therapy, rehabilitation, and even medical expenses related to surgeries that result from an auto accident. PIP coverage will also pay for lost wages.
There are different levels of PIP coverage a Michigan policyholder can buy when getting auto insurance. Before July 2020, all auto no-fault policies had unlimited medical coverage.
In 2022, the personal injury protection (PIP) coverage options are the following:
- Unlimited PIP coverage.
- $500,000 in PIP coverage
- $250,000 in PIP coverage.
- $50,000 in PIP coverage for eligible individuals
- No PIP coverage for eligible individuals
Every individual is eligible for the first three categories (Unlimited, $500,000, and $250,000).
For individuals who are on Medicaid, they can select a PIP limit of $50,000. However, their spouse or a family member living with them must either also have Medicaid, have their own no-fault auto policy, or have “qualified health coverage.”
There are certain individuals who can choose to “opt-out” of PIP coverage entirely. Those individuals must meet a certain requirement though. They must have qualified health coverage.
Under Michigan law, MCL 500.3107d, “qualified health coverage” (QHC) means:
(1) Private health insurance that does not exclude or limit coverage for injuries related to a car or truck accident; or
(2) Individuals covered by Medicare Parts A and B.
Many people think their private health insurance covers car accident treatment. But many do not. Most are ERISA plans that actually specifically exclude the treatment of car accident. Instead, they say the at-fault driver’s insurance must pay.
Because of this, it is important to reach out to your health insurance company and find out if they cover all auto accident-related treatment, without any limitations. If they do not, then under Michigan law you cannot select a PIP opt-out plan.
Choosing PIP coverage is a major decision. We all want to save money. However, it is important to make sure you are protected in case a horrible car accident occurs. Medical expenses can get very expensive very fast. A three-day hospital stay can cost more than $30,000. Failing to be properly insured can be financially catastrophic.
#2 – There are Many Bodily Injury Coverage Options
Besides having adequate medical coverage, it is important to protect yourself in case you, or anybody driving your vehicle, causes a car accident. Bodily injury (BI) covers you if you cause an accident that leads to personal injury in Michigan.
In 2022, the minimum amount of bodily injury coverage an individual can select in Michigan is $50,000 per person or $100,000 per accident. However, most policies have a default coverage amount of $250,000 per person or $500,000 per accident. To select less than this default limit, the applicant must sign certain forms.
Because there are now limits in PIP medical coverage, people who cause an accident are now open to huge exposure for the injuries they cause in Michigan car accidents. Not only can they sue you for pain and suffering, but they can also include past and future medical bills. This can add up and make a small case a big case. It is important to have at least the default $250,000 in bodily injury coverage.
#3 – Beware of LA Insurance
Auto insurance companies are continuously in a race to the bottom. The race entails charging the most money for the worst coverage. This race to the bottom only continues in 2022. One of the worst offenders is LA Insurance.
This insurance agency sells budget policies to individuals in mostly urban areas where cost of car insurance rates are sky high. LA Insurance is not an insurance carrier. It is simply an insurance agency that takes a commission by selling crappy policies to unsuspecting people. One of the major carriers they sell is Progressive Insurance.
It is important to beware of LA Insurance. First, the policies they sell are usually not good. They include a $50,000 PIP coverage limit with the minimum $50,000 bodily injury limit. The rates they charge for this low coverage are exorbitant.
However, what makes LA Insurance so bad is the agents don’t care about getting the information correct during the application process. They don’t ask the applicants detailed questions. They are in a rush to make a sale. They don’t fill out the insurance application correctly. This can cause major problems later on if an accident occurs and a claim is made.
Failing to put the correct information down on an insurance application can allow the insurance company – such as Progressive – to void or rescind the insurance policy when a claim is made after a car accident.
For example, if an application asks to list all individuals 14 years-old or older living in the household at the time the policy is purchased, the application must list everybody. Even the 15-year-old kid who doesn’t have a license.
Failing to do this can allow an insurance company to claim fraud and not pay a claim. LA Insurance is notorious for filling out insurance applications incorrectly or missing key information. This gives the insurance carriers a way to get out of paying otherwise valid claims.
#4 – Everyone With a Policy Will Get A Rebate
In December 2021, Governor Whitmer announced that the all policyholders will receive a lump-sum payment of $400 per vehicle. This payment must be made no later than May 9, 2022. This money is coming from the surplus money in the Michigan Catastrophic Claims Association (MCCA) fund.
For years, when people paid their auto insurance premiums, part of that money went into a fund that helped pay for people most severally injured in a car or truck accident. These individuals have what are known as “catastrophic claims”. They include spinal cord injuries like quadriplegia and paraplegia, traumatic brain injury and other awful injuries.
Although outsiders are not permitted to actually view its books, according to the state the MCCA fund has a surplus. Because of this surplus, every person who has an auto policy should expect a $400 check for each vehicle by spring time.
#5 – If You Want to Opt-Out of PIP, You Better Have Qualified Health Coverage
As explained above, a person applying for car insurance in Michigan can select to not have any PIP coverage if they meet certain requirements. The major requirement is having “qualified health coverage” (QHC). A person has QHC if their private health insurance covers all auto accident-related treatments or they are on Medicare Part A and Medicare Part B.
In 2021, people applying for car insurance could simply check a box stating they have qualified health coverage. The insurance agent or insurance carrier did not have to check the accuracy of this declaration. Many people really don’t know if their health insurance covers Michigan car accidents. They may think their health insurance does, when it in fact does not.
But in 2022, the onus will also be on the insurance carrier to check before selling a policy with no PIP coverage. In 2021, the Department of Insurance and Financial Services (DIFS) issued Bulletin 2021-25-INS. DIFS is the state agency that regulates the auto insurance industry in Michigan.
The bulletin says that any applicant who opts-out of PIP coverage, but “fails to provide the requires proof of QHC for any or all household members to qualify for the exclusion, the insurer must issue a policy with $250,000 in PIP medical benefits…”
This means insurance agents and carriers – such as State Farm, Allstate, or National General, must provide an auto policy with $250,000 in PIP coverage unless the applicant provides proof of qualified health coverage.
However, at the end of the day the ultimate onus is still on you, the applicant. If you don’t have qualified health coverage, don’t opt out of PIP coverage. If a car wreck occurs, and you are injured, you may be left hanging with thousands in medical bills.
#6 – Shop Around for Auto Insurance, But Don’t Be Greedy
A lot of people look at full coverage car insurance in Michigan as a commodity. It’s all the same. So just get the insurance that is the cheapest car insurance. But that is not smart thinking. It is important to shop around for car insurance in 2022. Look for good deals. But make sure to also look for good coverage that will protect you and your family in case something awful happens.
The best way to get solid auto insurance is by asking a lot of questions and by going through an independent agent. An independent agent has multiple insurance carriers he or she can sell insurance through. They are not a captive agent like a State Farm or Allstate agent. Because of this, they can provide multiple insurance options to you. When you get these options, ask the agent what it all means.
If you don’t know what something means, ask them to explain it. It is important to know what you are purchasing. There is no shame in not knowing what something means. Insurance is confusing. Get your questions answered and make sure you purchase adequate insurance that protects you in case a horrible Detroit car wreck occurs.
If you have any questions about auto insurance, give our law office a call. Our professional team of Michigan car accident lawyer have been protecting the public for over 40 years. Call us toll free at 1-800-LEE-FREE (1-800-533-3733). The consultation is free, and we never charge a penny until we win your car or truck accident case.