Michigan No-Fault Auto Insurance Reform

Bodily injury liability coverage requirements

Michigan no-fault auto insurance reform took effect on July 2, 2020. This page explains bodily injury liability coverage and the new requirements.

What is bodily injury liability insurance?

Bodily injury liability insurance covers claims made against the named insured and resident spouse for injuries to others if you’re at fault in an auto accident. People who aren’t insurance geeks (like we are) or lawyers (like we are not) might call this “auto liability.”

What will be required starting July 2, 2020?

As of July 2, 2020, Michigan law will require that insurance carriers provide bodily injury limits not less than $250,000 per person and $500,000 per accident for bodily injury claims unless you select higher or lower limits. You won’t be able to choose limits lower than $50,000 per person and $100,000 per accident. This is an increase from the previous minimum requirements, which were $20,000 per person and $40,000 per accident.

What does Keyser recommend?

We recommend that you purchase the highest limits you can afford, but no lower than $500,000 per person and $1 million per accident. While these coverage amounts sound high, bodily injury insurance is actually fairly inexpensive. Paying a little extra to fully protect yourself, your family and your assets is well worth it.

Here’s why:

  • Your financial assets are at risk now more than ever. We realize this sounds dramatic, but it’s true.
  • Because of the new personal injury protection options, there will be people with varying limits of protection (anywhere from unlimited to none), which means an increased risk for lawsuits. If an auto accident is your fault, you may be on the hook (or liable as the insurance geeks and lawyers would say) for pain and suffering damages as well as medical and other care.
  • The damages your policy pays will depend on the limits you choose, so if you’re not adequately covered, you’ll pay out of pocket for anything over your policy limits. Which could be a lot and lead to serious financial consequences like assets being seized, a lien on your home or your wages being garnished.
  • Nearly all (99 percent) PIP claims are covered with a $500,000 limit. This doesn’t include pain and suffering.

If you don’t have a personal liability umbrella, we suggest you call your agent to talk about this kind of protection.

Is there anything else I should think about?

We’re glad you asked. There is.

We also recommend that you purchase both underinsured and uninsured motorist coverage limits of at least $500,000 per person and $1 million per accident.

Here’s why:

  • Underinsured motorist coverage protects you and your family in case you’re in an accident caused by a driver whose bodily injury limits won’t fully cover the expenses of those injured.
  • Uninsured motorist coverage protects you and your family if you’re in an accident caused by a driver who doesn’t have auto insurance at all.

Think of it this way: Auto accident injury-related expenses can quickly add up. If you’ve selected a low PIP coverage amount and you’re hit by someone who has the lowest bodily injury coverage allowed ($50,000), you could find yourself without the means to pay for them and dangerously exposed. Underinsured and uninsured motorist coverage is something simple you can do to protect yourself and your family for a relatively low cost.

When do I have to decide and what do I have to do?

About 60 days before your renewal date, your carrier will mail (or email if you’re signed up as “paperless”) bodily injury election forms. If you already have limits of at least $250,000 per person and at least $500,000 per accident and don’t want to make any changes, you won’t have to do anything. If you currently have lower limits, you’ll need to elect the coverage limit you want and return the forms to the carrier. If you don’t, your bodily injury limits will default to $250,000 per person and $500,000 per accident.

If you have lower limits, you don’t have to make any changes before your renewal. However, if you want to increase your protection now, you may. If so, you should contact your agent to talk about your options.

I want to make sure I understand everything correctly and make the best choice for me. Can I talk to someone?

Absolutely. That’s why we’re here — to take care of you. Please reach out to your agent with any questions.

If you have a friend or family member who could also use some help, we’re here for them too. Have them give us a call at 877.381.3570 or let us know so we can get in touch.