Michigan No-Fault Reform

Stay Up to Date on the Changes Coming to Personal and Commercial Auto Insurance

 

On July 2, Michigan vehicle owners will have more choices for their auto insurance coverage. For nearly 50 years, drivers had unlimited no-fault coverage: their insurance company paid medical bills for injuries suffered in a crash, no matter who caused it. This coverage was effective, but also often expensive. In 2019 Michigan’s auto insurance laws were changed, with most of the law taking effect July 2, 2020.

Here’s a brief look at what’s changing for Michigan drivers. Note that this guide is only a starting point; for more details on coverages and costs and to discover what’s recommended for you, talk with your local independent insurance agent about Hastings Mutual personal and commercial auto coverage.


What’s changing for me?

Starting this July, drivers can choose the amount of coverage their policy offers. There are two types that need to be selected:

1

Personal Injury Protection (PIP)

If you get in a vehicle accident, PIP coverage pays for your care, recovery, rehabilitation, wage loss, and replacement services. This coverage also includes some funeral expense benefits and survivor’s benefits which are paid to your dependents if injuries from an accident result in your death. This coverage applies whether it was you or someone else who caused the accident.

As a result of this change, the cost of PIP coverage for a vehicle will be reduced by the minimum average amount shown below. This may have an effect on the cost of your auto insurance.

Untitled Document

 

Option
Coverage Amount
Minimum average reduction per vehicle in policy cost
(for PIP expenses)
Option 1
Unlimited-10%
Option 2
$500,000
-20%
Option 3
$250,000
-35%
Option 4
$250,000 Limited*
-100%
Option 5
$50,000
-45%
Option 6
Opt out ($0)*
-100%

*Consult your agent — special eligibility rules apply

 

2

Bodily Injury Liability

Bodily injury liability insurance covers claims made against you for injuries to others if you are at fault in a vehicle accident. Bodily injury coverage is expressed as two numbers: a per-person limit (the maximum payment for each person injured in an accident) and a per-accident limit (the maximum payment amount available for all people injured in the accident, even if it doesn’t reach the per-person limit for each of them).

The new minimum limit for bodily injury liability is $50,000 per person and $100,000 per accident (this is usually written as 50/100).

 

There’s also a modified definition of who’s covered by a policy.

insured profile image

Definition of Insured

Starting July 2, “insured” means:

  • The named insured — the primary person covered by the policy
  • His or her spouse
  • Any relative of the named insured who is a permanent resident of the household (like children)

What do I need to do?

When you buy a new auto insurance policy or renew your existing one, you’ll have two selection forms to fill out:

  • PIP: Michigan Selection Of Personal Injury Protection Medical Coverage
  • Bodily Injury: Michigan Liability Coverage Limits Selection*

There are individual/personal versions for you and commercial versions if you own a business.

If you fill out the Bodily Injury form, it only needs to be completed once (unless you change your coverage), but the PIP form will need to be filled out each time your policy is renewed.

Personal Auto

PIP
Personal Auto PIP form draft thumbnail
Bodily Injury
Personal Auto Liability Coverage Limits Selection form draft thumbnail

Commercial Auto

PIP
Commercial Auto PIP form draft thumbnail
Bodily Injury
Commercial Auto Liability Coverage Limits Selection form draft thumbnail

*The Choice Of Bodily Injury Liability Coverage Limits form (below) is only needed if you want a coverage amount less than $250,000/$500,000.

Personal Auto PIP form draft thumbnail

Where do I get forms?

Talk to your insurance agent about your Hastings Mutual policy. He or she will have a copy of the forms available. We’re mailing copies to each of our policyholders. You can also download forms by clicking the thumbnails above.

It takes just moments to complete the forms. When you’re done, please return them to your agent.


Do all of the insurance changes have you confused?  We're here to help!

Every policy is different, but if you and your family are in one of these situations, click “What should you do?” and take a look at our recommendation for your auto insurance coverage.

photo of Charlotte Williams

College Student

Charlotte Williams lives in a dorm at MSU and drives a car she owns. She returns to her parents’ home every few weeks and during the summer. Charlotte is still listed as an insured on her parents’ auto insurance policy.

photo of Charlotte's parents

What to do...

Because Charlotte does not permanently live away from her parents, she should remain on their policy.

This example does not indicate coverage – each claim must be evaluated by its own details.

photo of young soccer players

Only Some People Have Insurance

Jim Smith is driving his minor daughter, Kelly, and her friends Beth and Laurel to soccer practice. Jim veers off and hits another vehicle. Everyone in Jim’s vehicle is injured. Beth’s parents have insurance with another company; Laurel's parents do not have insurance.

photo of Jim Smith

What to do...

Jim and Kelly will receive PIP from Hastings Mutual*; Beth will receive PIP from her parents’ auto policy*; Laurel will receive PIP subject to a limit of $250,000 from the Michigan Assigned Claims Plan, created for those without insurance; PIP coverage is specific to people and does not apply to vehicles.
*Subject to the limits purchased.

This example does not indicate coverage – each claim must be evaluated by its own details.

photo of Greg and Faith

Self-Insured

Greg Waters attends NMU with Faith Mitchell. His parents live in Saginaw, so he also only returns home each summer — but unlike Faith, Greg owns his own car, titled to him. He has insurance, but not with Hastings Mutual.

photo of Greg's parents giving thumbs up

What to do...

Greg’s parents, who do have a Hastings Mutual personal auto policy, should list Greg as a driver insured elsewhere.

This example does not indicate coverage – each claim must be evaluated by its own details.

photo of Ben Johnson

Split Custody

Ben Johnson is 17 years old. His parents both live in Lansing but are divorced. Ben lives with his mother and sees his father every other weekend.


photo of Ben's mom

What to do...

Ben should be listed on his mother’s policy, because he resides at her residence. If he is injured in an auto accident, his mother’s insurer will pay his PIP benefits up to the limits she has selected.

This example does not indicate coverage – each claim must be evaluated by its own details.

photo of Faith Mitchell

Not A Car Owner

Faith Mitchell is attending Northern Michigan University. Her parents live in Coldwater, so she only makes the long trip south to return home each summer. She does not own a vehicle.

photo of Faith's parents

What to do...

Faith can remain on her parents’ policy. She is considered a resident relative.

This example does not indicate coverage – each claim must be evaluated by its own details.

photo of David Brown

Child Temporarily Away From Home

David Brown is in his final year of college. He still has a bedroom at his parents’ home but stayed in his apartment near campus last summer instead of going home. David is still dependent on his parents for some finances and the car he drives is titled to his dad. He is about to begin his career and does not plan to live with his parents.

photo of David Brown upset

What to do...

Since he is now living off campus, David may not be considered a resident of the named insured’s household, so he may not be covered by his parents' policy. The title of the car should be transferred into David’s name and then he should be placed on his own policy.

This example does not indicate coverage – each claim must be evaluated by its own details.

photo of Jessica Rios thinking

Non-Resident

Jessica Rios and her family have opened their doors to Ashley Miller, an old friend of Jessica’s. Ashley just moved back to the area to look for a job. She’s living with Jessica’s family until she can afford her own apartment. She doesn't have her own car, but occasionally borrows Jessica’s car to attend job interviews. Ashley assumes she'll be covered by Jessica’s auto insurance if she's injured in an accident.

photo of Ashley Miller

What to do...

Since Ashley is not the named insured, spouse, or resident relative, she is not an “insured” under Jessica's auto policy and is not insured for PIP benefits. If injured on her way to a job interview, Ashley would be eligible for PIP coverage subject to a limit of $250,000 from the Michigan Assigned Claims Plan, created for those without insurance. Ashley has liability coverage for any bodily injury or property damage she causes.

This example does not indicate coverage – each claim must be evaluated by its own details.

photo of Henry Stuart

Borrowing a Vehicle

Henry Stuart is a nice guy; he always lets people borrow his truck. His friend Jack borrowed Henry’s truck for the day to move furniture into his son’s apartment, but Jack causes a head-on collision. The accident causes severe bodily injury to Jack, his son, and the people in the other car.

photo of Jack

What to do...

Since none of the people in either vehicle is Henry, his spouse, or one of Henry’s resident relatives, no one is covered under Henry’s insurance. They will have to have another policy. The damage to Henry’s truck will be covered, though, if he has collision coverage on his policy.

This example does not indicate coverage – each claim must be evaluated by its own details.

photo of Phillip

New Driver

Phillip Jones gave his granddaughter Emma his old car for her birthday. She’s excited to drive — safely — but Phillip isn’t sure how to update his insurance to include her.

photo of Emma pouting

What to do...

Phillip should not add Emma to his insurance. He should transfer the vehicle’s title to Emma. Because she will have her own vehicle, she should have her own policy. Even if Phillip retained the title to the car, after 30 days Emma becomes the statutory owner of the vehicle.

This example does not indicate coverage – each claim must be evaluated by its own details.


Frequently Asked Questions

No, you can make the change at any time on or after July 2, 2020.

Yes, they will be sent well in advance of you policy renewal date. You will also receive a letter from Hastings Mutual explaining the forms and asking you to return them as soon as possible.

You can download the forms right from our website by clicking on the form thumbnails located above.

It takes just moments to complete the forms. When you're done, please return them to your agent.

If you don’t make a PIP and/or Bodily Injury Liability selection on the appropriate forms and return them, your policy will default to the following coverage amounts:

  • PIP: Option 1 — Unlimited
  • Bodily Injury: $250,000/$500,000

 

Your local independent insurance agent is always ready to help with your questions on your Hastings Mutual auto insurance policy.

Other Resources

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Download Our Reference Guide

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Michigan Department of Insurance and Financial Services

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This information is not an offer of coverage or change to any existing policy. There is no representation as to the completeness of any information here. Please contact your local independent insurance agent with further questions and for more details on any insurance policy-related information you read here.