What Is Personal Injury Protection? What You Should Know About Michigan No-Fault
July 29, 2019
Recently passed no-fault reforms, which take effect July 1, 2020, have sparked a great deal of conversation among Michigan motorists. At the same time, many drivers are confused by the current and extremely complicated no-fault system. You may have heard the new law will have the greatest impact on personal injury protection or PIP benefits. But what is personal injury protection, and how does the coverage actually work?
Here are the answers to some commonly asked questions.
What is personal injury protection?
If you or a covered family member is injured in an accident, your personal injury protection (PIP) coverage will pay all medical and related expenses. These benefits are also known as “first-party benefits” because they are paid by the policy holder’s insurance company.
PIP provides unlimited lifetime coverage for the following, providing the costs are reasonable and necessary:
- 100% of medical costs, including hospitalization and surgery
- Home care or other assistance necessitated by your injuries
- Rehabilitation or other physical and/or occupational therapy
- Mileage for doctor visits or therapy appointments
PIP provides the following coverage for a maximum of three years
- 85% of lost wages, up to a current monthly maximum of $5,700*
- Up to $20/day in replacement services, which includes routine household chores, yard work and other such services
- Survivor loss benefits, up to a monthly maximum of $5,700*
*Monthly maximums are reviewed and updated every October to reflect changes in the cost of living. Victims and survivors are entitled to the amount in effect at the time of the accident, even if the maximum increases during their three-year benefit period.
Currently, insurance companies are not required to cover medical marijuana or expenses related to its use.
Who else is covered by my PIP benefits?
Your no-fault policy covers every member of your family residing in the same house. This includes your spouse, children and other relatives, providing they live in your household.
These family members are also covered if they are injured in a pedestrian or bicycling accident or while riding in someone else’s car. If someone else is hurt in an accident involving your car, they will be covered by your no-fault policy only if they don’t have their own. Otherwise, the injured person’s own insurance policy will cover their accident-related medical expenses.
Do I still have personal injury protection coverage if I’m at fault?
By definition, no-fault insurance covers your economic losses if you’re injured in an accident, regardless of who was at fault. Therefore, you would still receive personal injury protection benefits for medical expenses, attendant care, lost wages and replacement services.
Fault becomes a factor only if you are suing for non-economic damages, such as pain and suffering. This compensation is typically paid by the other driver’s insurance company. Consequently, drivers who are more than 50% at fault are not eligible to collect these damages.
What happens if I need care for the rest of my life?
Currently, personal injury protection benefits include unlimited lifetime coverage for all reasonable and necessary medical expenses. This includes attendant care for as long as you need it.
Reimbursement for lost wages and replacement services are limited to three years from when the accident occurred.
If I’m killed in an accident, will my survivors receive benefits?
Yes. Personal injury protection includes “survivors’ loss” benefits if you or a covered family member dies as the result of an accident. The deceased person’s dependents are entitled to collect this compensation for a maximum of three years.
Survivors’ benefits are calculated according to the economic contribution the deceased person made to the family. Factors such as wages and other income, medical insurance, pension, and Social Security benefits are taken into consideration.
In addition, personal injury protection benefits cover funeral and burial expenses up to $5,000.
How will the new laws affect my personal injury protection benefits?
As of July 1, 2020, vehicle owners will be able to select from different tiers of PIP coverage options. You may also elect to keep your current unlimited PIP benefits. Premium costs will be based on the amount of coverage you choose.
You will also be able to opt-out of PIP coverage completely if you are covered by Medicare or another insurance company that covers auto accident injuries.
“As you can see, Michigan no-fault is a complex system, with more confusing changes on the horizon. We understand the law and know how to win the compensation you deserve,” says Mark Bernstein of The Sam Bernstein Law Firm. “That’s why you should call us right away if you or a loved one is injured in an accident.”
Michigan auto accident law is complicated, but finding the right lawyer is simple.
Call 1-800-CALL-SAM today for a free no-obligation consultation.