Michigan No-Fault Changes Part 1

Car Insurance No Fault Reform

Michigan No-Fault Changes Part 1

By now you’ve most likely heard that changes are coming to Michigan’s No-Fault auto insurance system. The effects of the new legislation, which take place July 2, 2020 are lower rates for Michigan drivers while maintaining the highest benefits in the country and to strengthen consumer protections.

This is the first of a three part series to help understand what is changing and how those changes benefit you.

Lower Costs

Personal Injury Protection (PIP) Choice: You will now be able to choose a coverage level that is appropriate based on your needs and budget. PIP covers you and others covered by your policy for medical expenses that result from an auto accident.

Rate Reduction: Each insurance company will be required to reduce average PIP medical premiums. Your premium will depend on your individual circumstances and the coverage you select.

Fee Schedule: A required cost control measure between auto insurance companies and health care providers to make PIP medical coverage more affordable for consumers. The law sets a schedule of fees that can be charged by providers for PIP coverage.
Consumer Protections

Elimination of Non-Driving Factors: The new law prohibits auto insurance companies from using sex, marital status, home ownership, credit score, educational level, occupation, and zip codes in setting your auto insurance rates.

Fraud Investigation Unit: A newly-established unit investigates criminal and fraudulent activity related to the insurance and financial markets and works with the Attorney General and law enforcement to prosecute these crimes.

Michigan Catastrophic Claims Association (MCCA) Transparency: The MCCA is now required to provide an annual report to the Legislature, post an annual consumer statement on their website, and is subject to an audit by DIFS every three years.

Prior Approval: Auto insurance rates and policies must now be filed with and approved by DIFS prior to being offered to consumers.

Fines and Penalties: The new law allows for increased fines on insurance companies, agencies, and licensed agents for certain violations of the law.

Additional Changes

Residual Bodily Injury (BI) Coverage: The new law protects you from claims by other injured persons by increasing the minimum BI coverage limit an insurance company is required to offer you.

Mini-Tort: The new law increases the amount of money that can be recovered in small claims court for uninsured damages.

More information can be found here


We suggest that you consult with a licensed insurance agent prior to making any changes. For a review and quote of your current car insurance policy click here

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