Insurance Insights

Auto Insights – The New Michigan Auto Insurance Reform Law

Michigan Auto Insurance Reform –
What it Means for You

There has been a lot of talk lately about the new Michigan Auto Insurance Reform Law. Starting July 2, 2020, many changes to the existing no-fault auto insurance law will take effect in an effort to make Michigan auto insurance more affordable and decrease the number of uninsured drivers.

The new law requires new selections from you. With all there is to consider, the process might seem complicated. But as one of Michigan’s largest insurance agencies, VTC Insurance Group has the expertise to help guide you through the changes so you can select the right protection for you and your family.

To present you with the basics of the new reform law, we’ve provided answers to the questions we hear most frequently:

What are the major changes resulting from the new law?

The new law can make auto insurance more affordable by providing drivers with more coverage options. Here is what has changed:

  • Personal injury protection (PIP) options. Drivers will no longer be required to purchase unlimited no-fault PIP, and can instead choose their coverage level. Qualifying drivers may also choose to opt out of PIP coverage.
  • Bodily injury (BI) minimum limits. BI minimum limits will increase from $20,000 per person/$40,000 per accident to $50,000/$100,000, with a default minimum of $250,000 per person/$500,000 per accident.
  • Driver savings. Drivers can save anywhere from 10% to 100% on their PIP coverage, depending on their selection and their healthcare coverage.
  • Rating prohibitions. Insurance carriers can no longer factor in gender, marital status, home ownership, education, occupation, credit score and postal zone to premium rates.

Will my auto insurance rates change with Michigan’s no-fault reform?

Your savings will depend on your PIP and BI selections. The new law calls for a reduction of PIP premium cost based on the coverage selected, starting at 10% savings. Additionally, policies with unlimited PIP coverage will see a 55% reduction in Michigan Catastrophic Claims Association (MCCA) fees, from $220 to $100 per vehicle. This fee will only be charged to those who choose to maintain unlimited PIP coverage, while those who choose lower limits may avoid the fee altogether.

It’s important to consider a balance of coverage and price when making coverage decisions.

How can I make sure I have the right level of protection?

You’ve already taken a great first step by starting to educate yourself on the new law. Your insurance carrier will be sending you more details in advance of the July 2, 2020 effective date. And, of course, our VTC agents are ready to answer any questions you might have. Give us a call, or visit vtcins.com.

We invite you to check out our blog next week, which will feature an in-depth look at PIP and the options available to you. Stay tuned!

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