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Michigan’s auto insurance reform law allows drivers to opt out of buying unlimited personal injury protection (PIP), but they need higher liability limits. Michigan’s auto insurance reform law changed the state’s car insurance requirements for policies issued or renewed after July 2020. Michigan’s insurance reform also decreased the Michigan Catastrophic Claims Association (MCCA) fee, which drivers must pay if they purchase unlimited PIP insurance.
Michigan Auto Insurance Reforms After July 2020
- Drivers need $250,000 in personal injury protection per person, with lower limits or exclusions allowed for drivers with Medicare, Medicaid, or qualified health care.
- Insurers must offer an optional supplement to PIP insurance that covers attendant care, such as home nursing.
- Drivers need $50,000 in bodily injury liability coverage per person ($100,000 per accident), plus $10,000 in property damage liability coverage for accidents outside the state.
- Insurers must offer $3,000 in limited property damage liability insurance, which applies if you are 50% or more at fault in an accident and the other driver sues you for vehicle damage.
Michigan has some of the most expensive car insurance premiums in the country, as well as high fraud rates. To combat this, Michigan’s auto insurance reform law implemented several new consumer protections.
Consumer Protections Created by Michigan’s Auto Insurance Reform Law
- Insurance companies can no longer consider gender, home ownership, marital status, credit score, educational level, occupation, and ZIP code when determining rates.
- Drivers cannot be penalized for a lapse in auto insurance coverage as long as they apply for insurance by January 1, 2022.
- Michigan insurers must reduce PIP premiums, and all premiums need to be approved by the Department of Insurance and Financial Services.
- A new fraud investigation unit was formed.
- Fees and penalties for insurance companies who violate laws increased.
To learn more, check out WalletHub’s guide to Michigan’s car insurance requirements.
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