What are the big changes to Michigan's no-fault insurance?
May 10, 2023
As a part of the Detroit metropolitan area, Dearborn has a lot to offer residents. There are great amenities nearby, but all of that comes at a cost. Detroit is largely considered to be the highest-cost city in the United States for those who insure automobiles. You probably pay more than someone in New York or Miami pays for the same exact vehicle. Part of the reason for that extra expense is how Michigan's car insurance system works. When it comes to medical liability or bodily injury coverage, Michigan has a strictly no-fault approach to insurance. The policies that drivers carry protect them and the people in their vehicles from medical bills and lost wages after a crash. However, as of July 1, 2021, certain changes have gone into effect that will impact insurance coverage for drivers in Michigan.
What are the practical effects of no-fault reform in Michigan?
Lawmakers across the state have long pointed to insurance costs as a sign that reform was necessary. Now that no-fault reform has gone into effect, some drivers may notice a change in what they have to pay. Previous rules required that every driver carry unlimited no-fault coverage. Such protection was particularly beneficial for those who suffered catastrophic, lifelong injuries in car crashes. A brain injury or spinal cord injury could cause millions of dollars in lifetime losses, and the insurance company has to pay all of that under an unlimited no-fault policy. Now, Michigan drivers can still purchase unlimited no-fault coverage, but they can also select lower levels of no-fault coverage. Some drivers may be able to purchase as little as $50,000 worth of bodily injury coverage for a crash where one person dies or gets hurt and $100,000 worth of coverage for crashes with multiple injured people. There will be two immediate consequences of this change. The first will be that some drivers may lower their insurance costs. The second is that people who suffer catastrophic injuries in a collision may no longer have all of the coverage they could once have received. Analyzing your insurance policy to determine what amount of coverage is necessary and appropriate for you can help you balance cost savings with the protection you have in the event of a major motor vehicle collision.