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cbg

I'm a Northern Girl
This is work related for me.

I understand that MI has a new auto insurance reform law that went into effect this past month. Someone tell me about that law. Assume I know nothing about the past or current law and tell me about it the way you would explain it to an eight year old.

Thank you.
 


Zigner

Senior Member, Non-Attorney
This is work related for me.

I understand that MI has a new auto insurance reform law that went into effect this past month. Someone tell me about that law. Assume I know nothing about the past or current law and tell me about it the way you would explain it to an eight year old.

Thank you.
If your eight year old is driving, you've got bigger problems :p


EDIT: Sorry - couldn't resist.
 

Taxing Matters

Overtaxed Member
This is work related for me.

I understand that MI has a new auto insurance reform law that went into effect this past month. Someone tell me about that law. Assume I know nothing about the past or current law and tell me about it the way you would explain it to an eight year old.

Thank you.
Michigan is one of the few states that operates a no fault auto insurance system. Every driver is required to have insurance to cover damages and injuries when you get into an accident (as in other states) but the difference is that in Michigan when you are in an accident you always make the claims against your own insurance regardless of fault. And your insurance then pays you benefits regardless of fault.

The state law also set the minimum coverage each driver must carry as part of that no fault insurance. In addition to requiring certain minimums for bodily injury and property damage (which other states also require, though the minimum amounts of coverage you must carry varies by state) Michigan is unique in requiring personal injury protection (PIP) insurance, which pays you for the bodily injuries you sustain in an accident regardless of fault. And this is where the main change in Michigan law occurs. Prior to the change that was just passed, everyone had to have UNLIMITED PIP protection. That was a big reason why Michigan auto insurance rates were among the highest in the nation. The law now allows you options to buy reduced PIP coverage, which should lower auto insurance premiums should drivers select a lower PIP option. Unlimited PIP is still the default, though; the driver has to actively make the choice for something else.

Forbes has a good explanation of the changes.
 

quincy

Senior Member
The bottom line for Michigan drivers is that their costs for car insurance - once the highest in the nation - can be reduced substantially if they choose less coverage, an option drivers in Michigan didn’t have before.
 

cbg

I'm a Northern Girl
Okay, that helped.

The specific situation; one of our employees, who lives in Massachusetts, is married to a Michigan resident. The Michigan resident is attempting to add our employee to her Michigan auto insurance. The auto insurance broker has asked questions about his health insurance; about the deductible, the exclusions, and the coordination of benefits. The deductible and exclusions are easy, but they are looking for confirmation that the health insurance policy will pay as primary in the event of an auto accident. But the answer I got when I inquired was that the auto insurance policy would be considered primary. The health policy will pay in full as secondary after the PIP is exhausted.

I will say that the MA policy is not the best I've ever seen, but it's only marginally below the best. It is excellent coverage, the best offered to our New England population, and considerably better that most. But it will not do everything that the MI auto insurance policy wants it to do.

More for my own curiosity than anything else, I'm wondering what the likely result will be.
 

quincy

Senior Member
The likely result is that poorer people will choose the cheaper coverage so, if they are at fault in an accident, their insurer will pay less to the victim and the driver will have to cover the rest (probably in the form of an uncollectable judgment against them when sued).

The plus side is that there will be fewer uninsured drivers on the road, because insurance is now more affordable.
 
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Taxing Matters

Overtaxed Member
The likely result is that poorer people will choose the cheaper coverage so, if they are at fault in an accident, their insurer will pay less to the victim and the driver will have to cover the rest (probably in the form of an uncollectable judgment against them when sued).
Well, as I understand Michigan's no fault system, the insurance company of the victim pays for the victim's injuries regardless of fault. So if the victim has a great insurance policy, he or she will get paid for his/her injuries regardless of what insurance the at fault driver has. So if the at fault driver has crappy insurance that only is a problem for the victim to the extent the victim's own insurance does not cover it. Michigan law limits the extent to which the victim may sue the at fault driver: he/she may only sue for non economic damages (e.g. pain and suffering) and economic damages that exceed what his own policy will pay. So unlike other states, what the at fault driver is liable for in a lawsuit depends very much on what insurance his victim had. When everyone was required to have the same high levels of insurance, that quirk mattered less. Now that drivers can opt for lower, less expensive coverage, I can see where that could lead to some potentially odd results.
 

quincy

Senior Member
So now I understand the reasons for the questions. Thanks, gang.
There is a tie between a driver’s car insurance and a driver’s health insurance that didn’t exist before.

Overall the changes are good ones. A reduction in the outrageously high car insurance rates was long overdue.
 

cbg

I'm a Northern Girl
My primary concern was whether the health insurance was going to result in our employee being denied auto insurance.
 

Hiningla

New member
from July onwards lots of changes will hit the existing no-fault auto insurance law including giving Michigan drivers a choice in their level of PIP coverage. also, the new plan lets drives choose from up to six options for Personal Injury Protection coverage.
 

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