It is well known that insurance premiums can be expensive. Today, when you purchase car insurance in Detroit, Flint, Saginaw, Grand Rapids and throughout Michigan, you are presented with the option of opting out of PIP coverage. With the high cost of car insurance in Michigan, it can seem enticing to just tell your insurance agent to get you the cheapest policy possible. But there are many reasons why this is a bad idea.
In this blog, we discuss what PIP medical coverage means and why you should think twice before opting out of it.
What Is PIP Coverage?
PIP (personal injury protection) is an insurance coverage that is purchased when a person buys car insurance. PIP is medical coverage and pays your medical expenses not covered by health insurance after a car crash. It is also sometimes called “no-fault insurance”. On the declaration page of the insurance policy, the amount of PIP coverage is listed next to it.
Under Michigan law, individuals can select unlimited medical, $500,000 in coverage, $250,000, $50,000 (for certain Medicaid beneficiaries). If eligible, individuals can entirely opt-out of PIP all together, but this is strongly not recommended, as explained in detail below.
Who is Entitled to PIP No-Fault Benefits in Michigan?
Almost every person involved in an auto accident is entitled to receive medical PIP benefits. This includes people who don’t even own a vehicle. So long as a motor vehicle was involved in the crash, then PIP kicks in to pay the medical bills. For example, if you only own a bicycle, and you are hit by a car while cross the street, you can still make a claim for PIP benefits. The same goes for pedestrians and passengers. Contact the Michigan car injury lawyers at the Lee Steinberg Law Firm to get more information.
There is an order of priority to determine which auto insurance company is responsible for paying benefits. That order of priority is explained in detail here.
PIP coverage is sometimes confused with bodily injury (BI) liability insurance. This type of insurance pays pain and suffering caused by an at-fault motorist. BI insurance covers the negligent driver. It only pays medical bills if the injured person’s no-fault coverage is exhausted or runs out.
What Does PIP Cover?
PIP covers any necessary medical procedures in addition to any reasonable expenses to help you recover from your injuries you may have suffered in a Detroit accident. Such expenses include:
- Hospital bills
- Surgeries
- Doctor visits
- Prescriptions and co-pays
- Physical therapy and rehabilitation
- Lost wages
- Funeral expenses
- Accidental death benefits
- Home care expenses during your recovery time such as house cleaning or childcare
Sometimes PIP coverage from car insurance is primary for the payment of medical expenses, while health insurance is secondary. Other times, health insurance is primary. It all depends on the type of auto insurance and health insurance you purchased and what their plans describe. This is called coordination of benefits. An expert Detroit car accident lawyer will help you determine which insurance company must pay first.
However, there are specific rules for Medicare and Medicaid. Under federal law, Medicare and Medicaid are always secondary to PIP insurance. If a person has Medicare or a Medicare Advantage Plan, then no-fault insurance pays the auto accident related bills so long as the person did not opt-out of PIP.
What Does PIP Cover that Health Insurance Does Not Cover in Michigan?
The answer to this question depends on the type of health insurance you have. But in general, PIP medical covers lots of medical treatment and procedures that health insurance does not. For example, Medicare limits the number of chiropractor visits, physical therapy visits, in-home therapy care, and other treatment. Medicaid does the same and many doctors frankly won’t see if you are only on Medicaid.
Many private health insurance plans, like Blue Cross, HAP, or Priority Health, also have limitations on treatment. For example, these plans may limit the number of chiropractic and physical therapy visits, or not cover important procedures and surgeries. Many health plans require a referral. No doctor referral is necessary under a PIP plan. Many health plans limit prescription drugs, skilled nursing, in-patient care, hospital care, and other important treatment plans.
In addition, PIP coverage provides payment for in-home nursing care. This is also known as attendant care. This type of care includes help with hygiene, transferring, changing bandages, assistance with getting dressed and washing, driving and general supervision. Medicare and most health insurance plans don’t pay for this.
Most of these limitations do not exist with PIP coverage. So long as the treatment is medically necessary and related to the truck or car accident, then the car insurance company must pay for the treatment. Therefore, you have access to a lot more medical treatment through PIP coverage than regular health insurance.
In addition, it is possible that there may be some overlap in coverage for your PIP insurance and health insurance, but don’t let that fool you. Many health insurance policies exclude injuries sustained in a car accident, while PIP is specifically for car-related injuries.
Who is Eligible to Opt-Out of PIP?
A driver can opt-out of PIP, but only if they are eligible. To be eligible, the person has to meet criteria that is set forth under MCL 500.3107d. Specifically, an individual must have “Qualified Health Coverage.” By law, Qualified health coverage” means either of the following:
- Private health insurance that does not exclude or limit coverage for auto accident related injuries, and has an annual deductible that is $6,000 or less.
- Medicare coverage under both Part A and Part B.
If you do not belong to either category, then you must purchase PIP coverage when taking out car insurance. The first category are those with health insurance plans that pay for all car accident injuries, with no exclusions. There are few medical plans that offer this. The second category are folks who have Medicare. This is a large category of people. The problem is the last group of people who should be opting out of PIP coverage.
Why Choosing to Opt-Out of PIP is the Wrong Choice
By opting out of PIP coverage, you are placing yourself at the mercy of whatever medical coverage your health insurance plan maintains. But this coverage is usually substandard and won’t cover the rehabilitation and medical treatment needed after a major car accident.
For example, Medicare beneficiaries are either older or disabled. If you fall into this category, even a minor car accident can cause severe injuries that don’t go away. If a person opts-out of PIP coverage, then they are limited to what Medicare offers, which isn’t much.
By choosing to maintain PIP coverage, like a $250,000 Plan, a person injured in a crash can turn to their own auto insurance for payment of up to $250,000 in medical bills. This large amount can pay for surgeries, out-patient care, medications, therapy and other treatment Medicare, Medicaid and other health insurance plans simply won’t cover.
Contact the Best Detroit Car Accident Injury Lawyers
PIP coverage can mean the difference between recovering and living a happy life or getting crushed by medical bills after a car accident. There are so many reasons why opting out of PIP coverage is a bad idea, so don’t restrict yourself from receiving the help you need. The Lee Steinberg Law Firm has been helping car accident victims for over 40 years obtain the no-fault benefits and pain and suffering compensation they deserve.
Call our office today. You pay nothing unless we win your Detroit car accident case. Let us help you by calling 1-800-LEE-FREE (1-800-533-3733).