Update On Michigan New Auto Insurance Law
I first wrote about this in November, 2019. We had our first change in the Michigan No-Fault Law in the summer of 2019 and we have had additional changes that have gone into effect in the summer of 2020 and at the beginning of July, 2021.
We are now starting to see the horrible effects of this new law.
We are working on our first case for a man that is catastrophically injured and will require ongoing medical care for years.
His family opted for $250,000.00 in medical coverage. He was in the hospital for 12 days and underwent one surgery. After one week in rehabilitation, he was discharged to his family.
Here is the problem. By opting for $250,000.00 in medical coverage, instead of the lifetime coverage he would have had under the prior law, his medical coverage is nearly depleted and he is going to have to rely on Medicaid to pay his medical bills. In our opinion, he was likely discharged from rehabilitation far sooner than he likely should have been. Hospital personnel specifically noted that their billing alone would near $250,000.00.
What does this mean for our client?
- Our client’s treatment will now be dictated by the fact that he will be a Medicaid patient rather than having the best insurance money could have been bought through No-Fault Insurance.
- We believe he was prematurely discharged from the care he needed, because the medical providers were worried they would not be sufficiently paid.
- He needs help at home, which could have been provided by his family. His family members, who are employed, would have been paid by No-Fault to take care of him. This allowable expense is part of the medical coverage, so his family members must either choose to forego their employment to take care of their loved one, but by doing so would be would be losing critical income needed to support the family.
- The driver who caused the accident is insured for $250,000.00. It is inadequate to cover our client’s injuries. To add insult to that injury, Medicaid will now have a lien against the amount of medical expenses that Medicaid pays on our client’s behalf. This will greatly reduce the amount of money that would have otherwise gone to our client as a result of his injury.
All this, and my client and his family probably saved no more than a couple hundred dollars by reducing their coverage from unlimited to $250,000.00.
As I said in November, 2019, do not opt for lower PIP limits. It is a very poor bet to make. Opt for unlimited benefits.
Everybody wants to save money. However, the change in our law provides an illusory minimal savings at best.
Again, make sure when you obtain your No-Fault insurance, you opt for UNLIMITED PIP BENEFITS. Also, you must raise your uninsured and underinsured motorist coverage. This is very inexpensive coverage.
These changes can mean the difference between lifetime medical care and an adequate recovery if you suffer a significant injury, as opposed to poor medical care and possible bankruptcy.
ALWAYS SPEAK TO YOUR ATTORNEY BEFORE SIGNING ANY PAPERWORK!
If you are involved in an accident involving a motor vehicle, CONTACT US to assist you in going through this complicated process.