Michigan No-Fault Changes Part 3

commercial auto insurance Grand Rapids MI

Michigan No-Fault Changes Part 3

Through our prior two posts you’ve now been made aware 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 third of a three part series to help understand what is changing and how those changes benefit you.  As a recap to Michigan’s new auto insurance law here are some highlights of cost reduction while maintaining benefits and increasing consumer protections:

Personal Injury Protection (PIP) Choice: Drivers will now be able to choose a coverage level appropriate for their needs and budget. PIP medical coverage pays allowable expenses for medical care if policyholders are in an auto accident. The new limits equal or exceed the highest benefits in the country, and Michigan is the only state where unlimited PIP medical continues to be an option.

Premium Reduction: Each insurance company is required to reduce statewide average PIP medical premiums for eight years. A driver’s overall premium will depend on their individual circumstances and the coverage they select.

Fee Schedule: A fee schedule will control the costs that medical providers may charge auto insurers. Auto premiums will be more affordable, but the services to which existing and future accident victims are entitled will not be affected.

Elimination of Certain Non-Driving Factors: Auto insurance companies are prohibited from using sex, marital status, home ownership, credit score, educational level, occupation, and zip codes in setting rates.

Fraud Investigation Unit: A new unit investigates criminal activity related to the insurance industry.

Prior Approval: Auto insurance rates must now be approved prior to being offered to consumers.

Fines and Penalties: The insurance industry is subject to increased fines for certain violations


We urge you to consult with a licensed insurance agent prior to making any changes.


West Michigan Insurance Office Contacts:

Grand Rapids    616.866.3180

Hesperia            231.854.5555

Shelby                 231.861.4195

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