Michigan Auto Reform: Should I Opt Out of PIP?
As of July 2, 2020, some Michiganders will be able to choose whether to opt out of Personal Injury Protection (“PIP”) coverage entirely. If you can do it, should you?
Who can opt-out? In order to opt out of PIP coverage entirely, you must demonstrate that you have medical coverage under Medicare Parts A and B or a Qualified Health Plan. Your medical coverage counts as a Qualified Health Plan if it does not exclude or limit coverage for injuries related to automobile accidents and has an annual individual deductible of $6,000 or less. In order to confirm that you qualify and obtain the required paperwork, you should contact your medical insurance provider.
Should I opt out? Whether to opt out of PIP coverage is a decision that may be different for everyone. Here’s a few key considerations you should weigh when making the decision:
- You can definitely save money by opting out, but you will also likely save some amount even if you keep unlimited. Ask your agent to review your policy to see how much you can save, and to help you compare your savings with different options.
- The benefits provided by PIP are substantially different than Medicare or Qualified Health Plans will provide. In addition to covering medical bills (without a deductible), PIP also provides for attendant care to assist with activities of daily living, benefits for lost wages, and even modifications to your home or vehicles that may be needed. You should discuss your current health plan with an agent to know what you’re giving up.
- Keep in mind the decision you make is not just for yourself—it also impacts the levels of coverage for others covered under your policy (children or other family members that live with you).
If I Opt Out, What Else Do I Need To Know? If you opt-out, and later lose the Qualified Health Plan that allowed you to opt-out (for example, if you retire or lose your job), you only have 30 days to inform your insurance carrier of your change in status and select a different PIP coverage. During those 30 days, you have $2,000,000 in coverage from the Michigan As- signed Claims Plan. On Day 31, you and everyone who has coverage through you will have no PIP coverage at all. Without PIP coverage or an underlying Qualified Health Plan, medical bills and expenses could be devastating to your financial situation.