In 2019, Michigan lawmakers altered the no-fault auto insurance policy. These changes, affecting premiums, coverage ranges and liability, go into effect July 1, 2020.

With summer on the way, residents and tourists alike will pack Michigan’s roadways for the first time this year. Local drivers must understand the changes to the laws governing insurance before getting back out on the road.

What has changed in the no-fault law?

Michigan joins 12 other states in the country with no-fault insurance laws. Established in 1973, the new system simplified the accident claim process and made it easier for drivers to recover faster. No-fault insurance laws require all drivers to carry Personal Injury Protection (PIP) insurance, property protection and residual liability. In return, those injured in auto accidents can expect lifetime medical coverage for injuries sustained in a car accident, including wage loss benefits. These laws also reduce the number of lawsuits over car accidents considerably, easing the burden of the courts.

Car insurance rates are on the rise, and the unlimited coverage rules prompt legislators to revisit the law. The Insurance Alliance of Michigan (IAM) states that increases in healthcare costs and vehicle repair require a more flexible legal landscape. With a growing number of Michigan residents no longer carrying car insurance, it was evident the law required a change.

Starting in July 2020, drivers now have more options when choosing car insurance. In addition to the unlimited PIP coverage, drivers can choose less expensive coverage with monetary limits up to $500,000. Drivers and their families on Medicaid or with health insurance plans that cover auto injuries can choose plans that only cover the cost of auto repair.

Insurance companies must comply with new regulations under the law as well. The new plans come at reduced rates from previous years. The law also prohibits insurance agencies from adjusting rates for non-driving factors like:

  • Credit score
  • Zip code
  • Education level
  • Occupation
  • Home ownership

Contact a lawyer for insurance claims

As insurance law changes, courts must play catch up for a little while as lawyers and courts study and interpret these new regulations. Those with questions about how these changes impact their policy can find answers with a local attorney familiar with Michigan car insurance laws.