Broker Check

Michigan no-fault reform

| April 22, 2020

Loyal mailbag readers,

There have been a number of questions in the mailbag recently about Michigan's no-fault auto insurance reform. With auto reform officially starting on July 2, 2020, below are a few key points and suggestions.

1) Personal Injury Protection – different medical coverage options

Drivers are soon going to be provided different Personal Injury Protection (PIP) medical coverage options on their auto-insurance plans. Currently in the State of Michigan, our auto-insurance policies offer a PIP medical coverage without a limit. This is called Unlimited PIP. 

Options of lower Personal Injury Protection (PIP) medical limits will be available effective July 2. Lower limits will likely decrease your auto-insurance premiums. Options other than Unlimited PIP include: $500,000, $250,000 and $50,000.

What does this mean? If you have an option other than Unlimited PIP and are in an automobile accident, your safety net from financial protection has been removed. Having watched a family member survive – through the grace of God – a horrendous auto-truck-deer collision where she was an innocent passenger, my suggestion is to maintain your Unlimited PIP medical coverage. A hundred or so dollars saved per year on your auto insurance (for something other than Unlimited PIP) is NOT worth the risk. It's not about your driving ability - it's the distracted texting, eating, "not-paying-attention" driver ahead of or beside you to be aware of and worried about.

Keep that financial safety net in place and maintain Unlimited PIP. The medical benefits provided by Unlimited PIP cover more than your health insurance and will be there if your health insurance is not.

2) Who lives where and which vehicle are they driving?

Blended families, kids driving, kids away at college, kids moved back in after/during college, multi-generational households... vehicles are shared, and that will be problematic with the new law. If you find yourself in this situation you need to call your insurance agent. If they don't know, call one of the agents at Emil Rummel Agency, Inc. ( for a list of offices and phone numbers) to have them help you.

Be 100% open and honest with your agent so they can guide you through the nuances. Maybe you have a scenario like step-daughter attending Michigan State, living in rental home in East Lansing with 3 housemates, and her auto insurance is taken care of by her dad. But right now she's living at your house wrapping up classes on-line... as an example, of course. Well, her driver's license has her dad's address on it. This situation could be messy so I run it past my insurance agent for guidance on what to do.

The new rule as of July 2, 2020 is that for someone to be covered by, say my Unlimited PIP coverage from my auto policy, that someone needs to 1) be related to me and 2) living in my home. Yikes! See how the scenario above gets tricky!?! That's real life. 

3) Increase your other auto insurance limits.  

There are terms like liability limits, underinsured and uninsured motorist coverage. The details don't matter. Make sure these limits are as high as possible. Liability coverage usually tops out at $500,000 (some insurance companies are now offering $1,000,000). Do it. And max out the underinsured and uninsured motorist coverage limits, too. The cost increase is generally very minimal.

4) Personal Umbrella Policy

Purchase what is called an "Umbrella" policy to add another $1,000,000 of liability coverage above and beyond the $500,000 liability coverage you need to have on your auto policy. Again, call your current agent. If they are unable to help you, please reach out the excellent team at Emil Rummel Agency, Inc. 

For most of us, an umbrella policy should cost less than $200 per year.


  • Keep Unlimited PIP
  • Increase all other auto insurance limits to the maximum amount allowed  
  • Buy a personal umbrella policy
  • Talk through who lives where and is driving what vehicle with your agent

Why? The courts and attorneys are going to try and figure out the details of who pays and when, based on the law Lansing passed. For the next two years there will be a lot of unknowns. Keep paying about the same for auto-insurance and keep the financial safety net in place. Wait for the legal system to provide framework to interpret and determine what new auto insurance law means to each of us.

And to all the loyal readers, please keep those questions coming in to

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