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Michigan’s PIP – Your Personal Insurance Protection

Perhaps you’ve heard about PIP or noticed the acronym in the fine print of your auto insurance bill. Now it is very important that you understand how your Personal Insurance Protection works as Michigan’s auto insurance reforms go into effect this summer

Since 1973, all Michigan auto insurance policies had to include Personal Injury Protection which provided unlimited medical benefits for the lifetime of a person injured in an auto accident.

Over time, as health care costs and the frequency of lawsuits rose so did insurance rates. Today Michigan’s auto insurance premiums are the 4th highest in the nation. These high premiums forced 20% of Michigan drivers to go without insurance which placed even more stress on the insurance system. It is because of these challenges that lawmakers recently passed reforms to Michigan’s no-fault auto insurance laws.

Auto insurance policies issued or renewed after July 1, 2020 for Michigan drivers will now offer six different options for Personal Injury Protection coverage. Your premium rate will reflect the specific coverage level you select. The more coverage, the higher your premium.  Policyholders who do not make a selection will default to unlimited coverage. 

When considering changes to your PIP coverage level, there’s more to think about than how much it costs. You will want to factor in your own personal risk tolerance and financial situation. What happens if you’re severely injured in an accident and your medical bills exceed your new coverage limit? Do you have enough health insurance to cover those bills? If you can’t work, do you have disability coverage? If you get sued for the accident, do you have savings or other assets that could be at risk?

This is a good time to review your policy and personal finances. Reach out to your agent for more detail and be prepared when the time comes to make the best PIP coverage choice for you.

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