As most MI residents are well aware, effective July 2, 2020 new options for reduced coverage for Personal Injury (PIP) and Bodily Injury (BI) protection coverages were made available through their automobile insurance carriers. These policy choices may be effectuated immediately or at policy renewal dates, however, since discounts to existing premiums is probable, immediate action is preferred. (www.michigan.gov/autoinsurance), the state’s excellent website, offers links to past and future town-halls on the subject, videos on filling out forms and downloads of more specific details which this announcement purports to supplement with additional client considerations to assist in the selection process.
Relative to PIP, there are six choices ranging from unlimited coverage to medical opt-out with premium reductions increasing inversely to the height of coverage selected. I believe it is fair to assume, that absent this announcement since most want to have maximum protection for auto-related, health costs and that examining this issue is not a favored activity by most, the default option of unlimited coverage would have been selected by many. However, this action negates a major purpose of the law change with which we can all agree -lowering insurance costs for a given level of protection- so please avoid this temptation.
The law change allows many who have excellent health coverage who were forced to pay for duplicative coverage under their auto insurance to opt for a coverage selection that continues “their” maximum coverage and saves annual premium dollars. To accomplish this, one must contact their Medigap or health insurance carrier and obtain a statement “that the policy does not exclude or limit auto accident injuries and has an annual deductible of less than $6,000” – some of you will need to obtain the statement through your employer. Those who have Long Term Care policies are even more protected.
Relative to BI, (the default option is $250/500k) the main consideration in selecting a lower cost option is the existence and amount of your personal liability umbrella policy. You need to discuss the appropriate coverage for you with your personal agent, but savings should be available given the above. Additional limitation on option selections are mandated for non-resident relatives and resident non-relatives insured under your policy.
The best way to proceed is as follows: 1) visit the website noted above to gain general familiarity with the provisions and specifics of the new law; 2) contact your health insurance representative relative to the statement mentioned above; 3) contact your insurance agent to examine not only the PIP and BI provisions of your existing policy and obtain quotes for the specific options, but to go over every line item of the declaration page so you know the benefits and necessity of each; and 4) contact at least one additional carrier to obtain comparative quotes for an equivalent policy.
I know this is a laborious process, however, my analysis indicates that the time cost for this examination is more than offset by the potential premium savings. Please remember that I am not an insurance expert but have specific knowledge relative to my client’s assets and goals and will be available to discuss your decisions and assist with any of the mechanics of form filings.