How Does Personal Injury Protection (PIP) Car Insurance Work in Michigan?

How Does Personal Injury Protection (PIP) Car Insurance Work in Michigan?

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As of July 2, 2020, auto insurance reform to Michigan's personal injury protection (PIP) requirements went into effect and may help drivers save on car insurance. Details of this measure, including potential savings, are outlined here.

In Michigan, all drivers must carry personal injury protection, sometimes called "no-fault" insurance. It's meant to cover a driver's medical bills after a car accident, no matter who was at fault.

What does PIP in Michigan cover?

The Michigan no-fault provision consists of four parts:

Medical costs

The following are eligible for a PIP claim:

  • Medical services and medication
  • Surgical services and hospital expenses
  • Rehab costs
  • Diagnostic services
  • Ambulatory services
  • Treatment in accordance with a recognized religion

Economic benefits

If you are disabled in a car accident, PIP will pay for your lost wages — up to three years or until you recover and go back to work. There are limitations, however. You can be paid 85% of your normal salary or a max of $5,398 per week, whichever is smaller.

You also receive up to $20 per day to pay for tasks you would normally handle but cannot. For example, you can hire someone to do laundry, clean the house and shovel snow. Before coverage kicks in, you would need to pay a $300 deductible.

Death benefits

If a policyholder dies in a car accident, then PIP would pay for the funeral and burial expenses up to $5,000. The policyholder's dependents are also entitled to work-loss benefits with the same limits: 85% of the policyholder's normal wages or a max of $5,398 per week.

Property protection insurance (PPI)

Unlike any other state, drivers are also required to have property protection insurance in Michigan. PPI will reimburse others for damage your car causes to a building, fence, wall or stationary car. The mandatory limit is $1 million for the entire policy.

How much does personal injury protection cost in Michigan?

Since PIP in Michigan is unlimited, it does come with a hefty price tag. Therefore, we recommend comparing policies from multiple insurers to find the best quotes for coverage.

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Furthermore, because Michigan doesn't allow drivers to sue for the cost of car repairs, you likely need collision coverage. This could drive prices higher, so we took a look at a few sample quotes.

Health care option
Type of driver
PIP price per year

Coordinated

42-year-old married man$582
30-year-old single man$414

Noncoordinated

42-year-old married man$592
30-year-old single man$422

Coordinating your health insurance with your PIP does save you a little money, but it seems to be negligible overall, at least for our sample drivers.

When and how to file a PIP claim in Michigan

Personal injury protection is straightforward: If you're injured in a car accident, then you're eligible to file a PIP claim. Unlike bodily injury liability and property damage liabilitycoverage, it doesn't matter who caused the accident.

Everyone in your household is also covered, whether they were injured in a car accident in a vehicle or as a pedestrian.

When filing a PIP claim, you will generally need to provide these forms:

  • PIP application that you submit to your insurance company.
  • Physician's note detailing your injuries.
  • A lost wage verification form if you're seeking wage-loss benefits.

Your insurance company doesn't have to pay for any expenses until they see a valid form of proof of injury. Once proof is submitted, however, your insurer has 30 days to make the payment. If they do not comply within those 30 days, they will be charged interest. As a patient, you have up to one year to file the claim.

Coordinated vs. noncoordinated Michigan personal injury protection

Like in other no-fault states, you may coordinate your health insurance with your PIP to help reduce costs. With a coordinated policy, PIP will pay for your wage loss while your health insurance pays for your medical bills. This move makes sense if your health insurance plan covers many services.

But there's at least one downside: You'd have to pay your health insurance deductible. The medical portion of PIP does not have a deductible, so filing a claim won't cost anything out of pocket. Furthermore, when you do not coordinate, you can waive the $300 deductible for the work-loss benefits of PIP. You will have to weigh which option is more cost effective for you — the reduced premium or not having to pay a deductible should you be injured in a car accident.

Know that if you are on Medicaid, Medicare or a self-funded health insurance plan, you will not be able to coordinate with your PIP.

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