How much PIP coverage do Michigan drivers need?

On Behalf of Holmes & Wiseley, P.C.

Car insurance in Michigan is notoriously expensive. In fact, it is much more expensive than the required liability coverage in virtually every other state. Those costs are, in no small part, a reflection of the state’s no-fault insurance requirements.

Until only a few years ago, every motorist had to carry unlimited no-fault personal injury protection (PIP) coverage in case they suffered a catastrophic injury of some sort in a car crash. This coverage is a costly addition to the liability coverage standard in most states. However, lawmakers reformed the law and reduced the required insurance amount. Now, they have taken steps to increase it again.

The minimum stands at $250,000 for most people

The state has adjusted the requirements so that the average motorist should have a minimum of $250,000 in PIP coverage. Some people, including older adults who already have Medicare coverage, can waive the PIP requirements on their car insurance policies. In addition to older drivers, those who have Medicaid benefits may qualify for reduced requirements of just $50,000 in PIP coverage. However, most motorists will need to carry six figures worth of no-fault coverage.

The state has also begun adjusting the coverage required to protect against liability when a crash causes severe injury or death. The default amount of bodily injury liability coverage is now $250,000 unless someone asks to change it, which is a major increase from the prior requirement of $20,000. The reduced minimum available upon request is at least $50,000 of injury-related liability coverage.

What do these changes mean for motorists?

Although mandating higher amounts of coverage does typically lead to more expensive policies, the reduction in coverage did not drive down policies to the extent that lawmakers had anticipated when passing the reform laws. The increase in minimum PIP and injury coverage will benefit the average motorist by ensuring that they have enough resources to cover their treatment costs or avoid a lawsuit after a catastrophic car crash.

Understanding insurance protection is important for anyone involved in a motor vehicle collision, as well as those who are worried about experiencing one in the future. Seeking legal guidance can be a sound way to clarify one’s rights and obligations in either scenario.

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