Auto Accidents – (248)-588-3333 – 2020 Auto insurance reform
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What changes were made by Michigan’s new auto insurance reform?
The reform that took effect on July 2, primarily affected regulations governing the minimum coverage requirements for Auto insurance in Michigan. The original no-fault law required that all auto insurance had to include unlimited lifetime benefits in the personal injury portion. In other words, it had to cover the medical expenses of any accident victim for the rest of their life if necessary. This is one of several reasons why Michigan auto insurance rates were the highest in the country.
The new law permits people to purchase policies with less stringent coverage (which are also cheaper). You may choose cheaper options with less coverage, but you cannot choose zero PIP coverage unless you have Medicare part A or B. Savings will be somewhat offset by the fact that the law also slightly raised the required level of Bodily injury (BI) coverage. This form of coverage covers your liability for bodily injuries caused by accidents.
Be aware, that you have to explicitly opt-in to reduced coverage. Otherwise, all policies will default to the unlimited coverage that was the norm before this reform was enacted.
Due to the fact that the original unlimited coverage requirement was designed to match the no-fault laws restrictions on liability and lawsuits, those restrictions have also been loosened. As a result, there are fewer restrictions on when and how much money you can get in lawsuits over car accidents.
The law also establishes new fee schedule standards. This controls how much medical providers are allowed to charge auto insurers for medical services resulting from car accidents. This is the same sort of cost control mechanism that health insurance policies already have.
The final perk of this reform law is that it prohibits auto insurers from using non-driving related factors to set insurance rates. These prohibited factors include:
- Sex
- Marital status
- Home ownership
- Credit score
- Level of education
- Occupation
- Zip Code
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