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Helpful advice for buying car insurance

Big changes coming on July 2, first time in No-Fault’s 40-year history, drivers will choose how much No-Fault medical coverage they would like to have.

GRAND RAPIDS, Mich. — Big changes are coming on July 2, 2020. 

It is the first time in No-Fault’s 40-year history, drivers will choose how much No-Fault medical coverage they would like to have available to pay medical bills for themselves and their families if they are injured in a car accident. Previously, all drivers were required to carry “unlimited” No-Fault medical coverage.

No-Fault medical coverage levels: Starting with any policies issued to you or renewed by you after July 1, 2020, you – as a Michigan driver – will have to choose one of the following levels of coverage for No-Fault medical benefits:

  1. $50,000 if you’re enrolled in Medicaid.
  2. $250,000
  3. $500,000
  4. Unlimited.
  5. Opt-out of No-Fault medical coverage altogether if you’re on Medicare. 

IMPORTANT: If a driver selects any level other than “unlimited,” then his or her medical bills will only be paid by the auto insurance company up to the coverage level in the policy and anything over that will be their responsibility (e.g., health insurance, Medicaid, Medicare, pay with personal assets and/or sue the at-fault driver for “excess” medical benefits).

Michigan Auto Law Attorney, Brandon Hewitt advises to choose the No-Fault PIP option with unlimited medical benefits (and no Managed Care Option)

Unlike private health insurance or Medicaid or Medicare, unlimited No-Fault PIP medical benefits provide lifetime, and life-saving care for catastrophic accident victims such as survivors of traumatic brain injuries and spinal cord injuries.

Unlimited is the only coverage level that provides catastrophic injury coverage.

It ensures that accident victims will have access to the best medical treatment, care, services and specialists that are reasonably necessary to their care, recovery or rehabilitation.

There are far too many critically important medical services that are not available or that are limited and will not be provided under health insurance, Medicaid or Medicare. 

Those may include: Residential care; Attendant care by an agency; In-home attendant care by a family member; Prescriptions; Hospitalization; Doctors/lab; Rehabilitation services; Case management; Transportation [possibly including medical mileage]; Home purchases/modifications; Prosthesis; Equipment; and, Vehicle purchases/modifications.

The medical costs associated with serious and catastrophic injuries from a car accident (especially those requiring emergency room visits, hospitalizations and surgeries – not to mention lifelong care) can and will easily exceed the dollar-amount coverage levels, leaving victims to fend for themselves to pay what could be hundreds of thousands or millions of dollars in medical expenses over their lifetime.

Unlike No-Fault PIP medical benefits, most health insurance plans do not cover or place limits on the following medical services that are essential for accident victims: Residential care; Attendant care by an agency; In-home attendant care by a family member; Prescriptions; Hospitalization; Doctors/lab; Rehabilitation services; Case management; Transportation [possibly including medical mileage]; Home purchases/modifications; Prosthesis; Equipment; and, Vehicle purchases/modifications.

Unless you enjoy the bureaucratic red tape your health insurance plan’s HMO – no doctor of choice, being to see only doctors that were selected and hired by the insurance company, having to get written pre-authorization from the insurance company for all visits, procedures, surgeries and treatment (or being forced to pay out-of-pocket as a penalty for not getting pre-authorization) – then under no circumstances should you opt for the Managed Care Option.

Choose liability insurance limits of at least $500,000 and $1 million

Drivers in Michigan have never faced as much liability risk as they will after July 1, 2020, when the No-Fault PIP medical benefits coverage levels become available so it is essential that they protect themselves, their families and their personal assets by purchasing bodily injury liability/residual liability insurance with limits of $500,000 and $1,000,000.

The financial risk from being liable for causing a car accident that injures or kills someone is so much greater now because in addition to continuing to be liable for pain and suffering compensation and excess wage loss, all drivers are now potentially liable for all of the current and future medical costs that a car accident victim incurs that exceed the No-Fault medical coverage level in the policy through which he or she is claiming benefits. 

For example, if you injure someone who only has $50,000 in No-Fault medical because he or she is on Medicaid and if he or she is catastrophically injured – resulting in $100,000s or $1,000,000s in medical bills – the person can sue you for any medical expenses over the $50,000 coverage level.

You will be very pleasantly surprised at just how inexpensive higher liability coverage is.

Do not be tempted to go with the $250,000 and $500,000 that is required by law – or by the lower limits of $50,000 and $100,000 that is permitted by law. Either choice is likely to leave you exposed financially in the event that you cause a car accident that results in another person’s injury or death.

Choose property damage insurance (for out-of-state accidents) with a limit of at least $100,000 and choose mini tort or limited property damage coverage with a $3,000 limit

The mini tort maximum recovery amount for vehicle damage will increase from $1,000 to $3,000 for car accidents after July 1, 2020.

Purchase uninsured motorist coverage with limits of at least $500,000

This provides an invaluable source for recovery if you’re injured by a driver with no liability coverage or by a hit-and-run driver. In either instance, without “uninsured motorist” coverage, you would be unable to recover any of the pain and suffering compensation and “excess” medical benefits and lost wages that you are entitled to. This added coverage is very inexpensive and very important.

Purchase underinsured motorist coverage with limits of at least $500,000

Like uninsured motorist coverage, UIM insurance provides a source of recovery for pain and suffering compensation and “excess” medical benefits and lost wages if the at-fault driver who injured you has only minimal liability insurance coverage. As with uninsured motorist coverage above, UIM coverage is very inexpensive and very important. Most drivers do not have enough insurance to pay for all of the harms and losses if they cause.

To learn more about the new No-Fault car insurance, visit michiganautolaw.com for more information. 

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