Changes to Come From Michigan’s New Auto No-Fault Law

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Changes to Come From Michigan’s New Auto No-Fault Law
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On July 1st 2021, certain changes will apply to Michigan’s auto no-fault law. These changes will affect everything from car insurance policies to how medical providers are paid following providing care to car accident victims. Previously, drivers had limited choices regarding their Personal Injury Protection (PIP) car insurance options, and medical providers were required to obtain an assignment of benefits from injured parties before pursuing compensation from the no-fault insurer. Additionally, caretakers used to be able to seek compensation equal to their wages while caring for a car accident victim, but this is not necessarily the case anymore.

Michigan drivers no longer have to purchase unlimited lifetime medical benefits for PIP.

PIP insurance is designed to help pay for the medical bills and even lost wages of a car accident victim who suffered serious injuries. In many states, PIP is a required part of any car insurance policy. It may be referred to as Medical Payment or MedPay coverage, and it may or may not be possible to waive.

However, Michigan’s requirement for drivers to purchase unlimited lifetime medical benefits for PIP lead to increasingly high insurance premiums. As a result of the new legislation going into effect on July 1st, 2021, policyholders may be able to lower their premium cost by selecting one of six different options for PIP insurance, ranging from waiving PIP altogether (not recommended by most car accident lawyers) to varying amounts of coverage per person all the way up to the original unlimited lifetime medical benefits.

Medical providers will also be affected by this new legislation.

Previously, the professionals who provided medical care to people injured in a car accident would have to obtain an “assignment of benefits” from the patient allowing them to pursue compensation from the insurance provider in order to be paid. However, under the new legislation, this will not be the case.

Instead, thanks to a 2017 Michigan Supreme Court (Covenant Medical Center v. State Farm) medical care providers will be able to directly pursue the insurance provider for payment, rather than first having the patient sign their benefits over. However, the new law will also limit the amount of reimbursement medical providers will be eligible to receive; namely, only reimbursement for care that would be covered by Medicare, which may exclude skilled nursing and professional in-home care.

Caretakers of accident victims will also be affected by this new legislation.

Similar to the limits placed on medical providers by the new law, family and loved ones who take off work to care for an accident victim may no longer be eligible to receive wage-replacement compensation. Instead, caretakers will be limited to payment for eight hours of work, despite many caretaking responsibilities being round the clock—especially after a severe or otherwise life-altering accident. Seeing as Michigan caretakers have previously been able to quit their day jobs entirely in order to care for an injured loved one at home, these new rules will likely have a significant impact on accident victims’ options for care and the finances of themselves and their loved ones.

To learn more about the changes to Michigan’s auto no-fault law, reach out to an experienced car accident attorney in the area.

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