Michigan Auto Reform: Am I Covered Correctly?
What Changed? The new law changes the “order of priority” for where an injured person must look for Personal Injury Protection (“PIP”) coverage. The law did not change where you look first: your own insurer (if you are a Named Insured) first, then the insurer of your spouse or a relative that lives with you (if that person is a Named Insured). What changed is that if none of those situations applied before, you could still get unlimited PIP coverage from other sources: through the insurer of the owner or registrant of the vehicle you occupied, or if the ve- hicle was uninsured, through the driver of that vehicle. Those options no longer exist. This leaves a significant gap in coverage!
Who Does It Affect? There are two basic groups of people who are no longer covered: (1) a Named Insured’s non-relatives who live in the same house; (2) relatives of a Named Insured who do not live in the same house. Practically speaking, here is who is generally covered un- der your PIP policy if they are injured in a motor vehicle accident:
Under the new law, if you are injured and do not have PIP coverage for yourself, or through a spouse or resident-relative, you are eligible to apply for up to $250,000 in medical benefits through the Michigan Assigned Claims Plan (“MACP”).
The Qualified Health Plan Trap: If you opted out of PIP or you selected a lower PIP limit that required proof of a Qualified Health Plan to be eligible, and you lose coverage under that Qualified Health Plan, you have 30 days to notify the insurer of that change and select a new PIP option. During those 30 days, you can apply for $2,000,000 in medical benefits through MACP; however, on day 31, you will have no coverage at all!
Please note, this article is for informational purposes only, is general in nature, and is not intended to and should not be relied upon or construed as a legal opinion or legal advise regarding any specific issue or factual circumstance.