Navigating Michigan’s New No-Fault Auto Insurance System

Published on February 15th, 2020

no-fault auto insurance michigan thurswell lawMichigan’s recently revamped no-fault auto insurance system will come with plenty of changes, and plenty of questions. The state has developed a consumer-focused website that offers details about the new system, explanations of the available coverage options, and shopping tips for finding the best carrier for every motorist’s needs. Here are the basics.

Health or Auto Insurance for Michigan Motorists?

Under the new system, it is expected that most drivers will see lower auto insurance rates. The perks will be especially evident for drivers in urban areas like Detroit where the no-fault medical benefits, also known as personal injury protection (PIP), can account for as much 50% of the price of a policy.

If drivers have private health insurance, they will want to find out whether that policy covers injuries suffered in an auto accident. If such injuries are covered by health insurance, they have the option to opt out of PIP and rely on their health insurance entirely should a car crash occur.

Motorists who are on Medicare or have commercial health insurance that covers car crashes (with a per-person deductible that is no higher than $6,000) can also choose to opt out of their auto insurance no-fault medical benefits.

Other drivers who don’t fit into these categories will be required to purchase some PIP coverage with their auto insurance. The thing to remember is that insurance companies are a business – they’re out to help themselves, and they’ll be especially diligent about serving number one in lieu of these changes to Michigan law. You must protect yourself as an insured motorist.

Different Insurance, More Options

Starting on July 2, Michigan motorists will have the option to buy less no-fault medical coverage with their auto policies, or they can continue to hold the currently mandatory and potentially unlimited lifetime medical benefits. More insurance carriers have applied to offer auto policies. The total number of authorized auto insurance carriers has increased to over 100 since the new no-fault system was announced.

Most health insurance plans no longer have lifetime limits, but no-fault medical benefits do cover factors that even the best health insurance plans don’t, like extensive in-home attendant care, lost wages, home and vehicle modifications, and long-term care in specialized rehab centers. The new laws make the unlimited lifetime benefits for auto possible for families that previously could not afford such a benefit, were going without insurance, or were barely making ends meet trying to comply with the law.

Insurance companies must comply with the new system and give consumers a mandatory eight years of guaranteed savings of between 10% and 100% off the PIP portion of their policies. Insurance companies are also forbidden from using non-driving factors when setting rates, like the driver’s job, education, and home ownership.

Get Clarity on Michigan’s No-Fault Insurance System

Michigan’s existing no-fault auto insurance system has been in place for a long time. The many possible choices of the new system require a level of education so motorists can secure the proper coverage, take advantage of potentially cheaper rates, and protect themselves on Michigan roads in case of a car crash.

Michigan has also created a hotline to help people prepare for the revamped auto insurance system. The number is 833-ASK-DIFS or 833-275-3437. Consumers can also email auto insurance questions to If you find yourself in a battle with your insurance company after a car crash, contact an experienced Michigan auto accident attorney at Thurswell Law to ensure that you have an advocate who will not rest until you get compensation. Schedule a consultation by calling (248) 354-2222 today.

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