Michigan recently revamped its no-fault auto insurance system, but how much motorists will gain in savings won’t be known until spring or summer. The new no-fault auto insurance system begins in July 2020, and it will very likely be accompanied by higher prices for liability insurance, which means the overhaul of the no-fault system is beneficial as it stands alone, but not so much when it comes to insurance premiums. Find yourself involved in a car accident and things could get complicated with your car insurance company, and expensive.
Michigan No-Fault Auto Insurance Changes
It is anticipated that many Michigan drivers will save money from this state insurance change, especially motorists who elect to stop buying the lifetime, no-fault medical benefits that are currently a mandatory purchase in Michigan.
However, those no-fault benefits often cover things that private health insurance or Medicare or Medicaid doesn’t cover should you get into an auto accident. Long-term in-home attendant care, lost wages, home or vehicle modifications, and long-term rehab care may not be included under the umbrella of personal health insurance, and that could be a pricey reality for car crash victims.
The goal behind changing the no-fault auto insurance parameters in Michigan that Governor Gretchen Whitmer signed into law last year was to lower auto insurance rates – Michigan has some of the highest in the nation. But is it really in everyone’s best interest? Or just the insurance companies’?
Determining New Car Insurance Premiums
A motorist’s location, vehicle type, and claims history all play a role in determining how an individual’s insurance rate premiums could change once the new law goes into effect. Most drivers won’t see or feel any changes until they receive renewal option paperwork from their insurance company. Proactive motorists can contact their insurance agents after the July start date for the new no-fault auto insurance system and cancel or renegotiate their coverage, potentially lowering their prices.
This new system is the first time that motorists have the option to buy less no-fault medical coverage, plus there are price controls for medical treatment and insurance companies are now forbidden to use non-driving factors when setting rates, like a driver’s job, education, or home ownership.
While medical providers may lose money under the price controls, and car accident attorneys are questioning whether insurance companies will pocket the savings from the new system without significantly lowering premiums, drivers on Medicare or with commercial health insurance that covers car crashes will have the opportunity to opt out of those benefits and save money.
Protect Yourself with the Right Car Insurance – and Legal Help
Ultimately, Michigan motorists will be wise to demand an honest conversation with their car insurance provider come July to determine whether they are paying too much for coverage, have enough coverage, or need to go elsewhere for a better deal. Currently, no-fault benefits – which are also known as personal injury protection (PIP) – can represent nearly half or more of the price of an insurance policy in urban Michigan areas. To make up for the changes so insurance companies can maintain their profitability, requirements regarding liability coverage of different types could increase, and so could drivers’ savings unless they’re careful and aware.
If you are struggling to get a meaningful recovery from an insurance company as an auto accident victim, contact the Michigan personal injury attorneys at Thurswell Law to get the compensation you deserve. Schedule a consultation by calling (248) 354-2222 today. We do not charge any fees until we win.
