Michigan PIP Decision Guide
Answer a few questions to understand which Personal Injury Protection (PIP) medical limits you are eligible for and which makes the most sense.
Understanding Michigan's PIP Options
In 2020, Michigan auto insurance laws changed drastically. Previously, every driver was required to carry Unlimited Lifetime PIP (Personal Injury Protection). Now, drivers have choices. While choices allow for potential savings, they also introduce significant financial risk if chosen incorrectly.
The 6 PIP Options in Michigan:
- Unlimited: The gold standard. Pays all allowable medical and rehabilitation expenses for life. (Recommended by KFA)
- $500k Limit: Caps PIP medical payouts at $500,000.
- $250k Limit: Caps PIP medical payouts at $250,000.
- $250k Limit with Exclusions: Anyone in the household with Qualified Health Coverage can be excluded from PIP medical entirely to save money.
- $50k Limit: Only available if the named insured is enrolled in Medicaid.
- Opt-Out: Only available if the named insured has Medicare Parts A & B, and everyone else in the household has Qualified Health Coverage or their own auto policy.
The Danger of "Qualified Health Coverage"
Many people assume their health insurance is "great" and opt out of PIP to save money. However, health insurance operates fundamentally differently from auto insurance PIP:
- Attendant Care: If you are paralyzed and need in-home care, PIP covers this. Most health insurance policies strictly limit or exclude long-term attendant care.
- Modifications: If you need a wheelchair ramp built onto your house or a specialized van after a crash, PIP can cover it. Health insurance will not.
- Wage Loss: PIP includes up to 3 years of wage loss. Health insurance does not (unless you have separate disability insurance).
Frequently Asked Questions
What is a QHC letter?
QHC stands for Qualified Health Coverage. To reduce or opt-out of PIP, your auto insurer needs proof from your health insurer stating that your deductible is under $6,500 and the plan covers auto accidents. You must provide a new letter every year at renewal.
What happens if I opt out of PIP but lose my health insurance?
You have 30 days to notify your auto insurance company and add PIP back on. If you do not, and you get into an accident, you will have NO medical coverage from your auto policy and could face massive out-of-pocket bills.
Does PIP cover my passengers?
Under the new laws, passengers generally claim PIP through their own auto policy, or their spouse/resident relative's policy. If they don't have one, they go through the Michigan Assigned Claims Plan (MACP), which caps at $250,000.
Is the MCCA fee still applied?
The Michigan Catastrophic Claims Association (MCCA) fee is charged per vehicle. Those who choose Unlimited PIP pay the full fee. Those who choose lower limits pay a significantly reduced fee to cover historical deficit costs.
Need Help Deciding?
We know this is complicated. Our agents are experts in Michigan PIP reform. Give us a call, and we can review your health coverage and advise on the safest PIP choice for your budget.
Call (616) 317-3747