Michigan Auto Insurance Reform

Michigan's new no-fault auto insurance reform law is giving drivers in our great state new coverage options to consider. AAA's No-Fault Auto Insurance Reform Center is here to help provide up-to-date information that can help Michigan drivers.

VIDEO: The new no-fault auto insurance reform law

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Michigan's Auto Insurance Reform Q & A

What is Michigan’s auto insurance reform?   Arrow-down

Today, Michigan drivers are required by law to have a No-Fault automobile insurance policy that includes Personal Injury Protection (PIP) benefits. While several states in the U.S. also have No-Fault requirements, Michigan's No-Fault law is unique in that the PIP coverage provides for unlimited medical benefits for the lifetime of the injured person when those injuries result from an auto accident. On July 2, 2020, many changes to the existing no-fault auto insurance law will take effect, including giving Michigan drivers a choice in their level of PIP coverage. Under the new plan, drivers will be able to choose from up to six options for Personal Injury Protection coverage.

Why is Michigan changing the law?   Arrow-down

Since 1973, all Michigan automobile insurance policies have had to provide unlimited Personal Injury Protection benefits. If you qualified for PIP benefits because you were injured in an automobile accident, you could get lifetime medical benefits for treatment related to your care, recovery or rehabilitation. It sounded like a great idea at the time — but as health care costs and the frequency of lawsuits continued to rise, it meant that auto insurance costs rose significantly, too. Today, Michigan has the 4th most expensive auto insurance in the country.1 Unsurprisingly, it is also ranked 4th in the U.S. with about 20% of drivers uninsured.2

When will auto insurance reform happen?   Arrow-down

While some parts of the law are already active, the parts that impact your selection options for PIP coverage go into effect on July 2, 2020. You don't have to do anything until you renew your policy, but in order to make the transition easy for you and your family, you can make your new selections in advance of your renewal date.

What is Personal Injury Protection? What are Allowable Expenses?   Arrow-down

What are my Personal Injury Protection Allowable Expenses (PIP AE) coverage options?   Arrow-down

What will my savings be when the new auto insurance law takes effect?   Arrow-down

How will the new law impact my auto insurance policy?   Arrow-down

What can I do to prepare?   Arrow-down

Have Questions? Talk to an agent.


How AAA Can Help

AAA is dedicated to putting our members and insurance customers first.

Our legacy of advocating for drivers

For more than 100 years, we've been advocating for America's drivers in numerous ways, from sponsoring bills to improve roads in the early 1900s to making grants to communities for lifesaving equipment such as the Jaws of Life.

Insurance that does more: Accident Assist®

If you're involved in an accident and have comprehensive and collision coverage, one call to AAA takes care of every step of the process, including dispatching roadside assistance, scheduling your repairs, and reserving a rental vehicle. That's just one more way we go above and beyond for our insurance customers.

Learn more about Accident Assist®

Maximizing your savings with Triple Check

AAA Triple Check is a quick, three-step review of your current auto insurance policy with your agent to check for any life changes or discounts. Triple Check can help you maximize your savings.

Learn more about Triple Check

Controlling costs by identifying fraud

AAA is committed to identifying and addressing all types of fraud in an effort to reduce costs. Our agents are trained to recognize questionable behaviors, responses, and motives. Sometimes, customers can be an unwitting party to fraud. If you suspect fraud, you can report it online or email us at ClaimFraud@AAAMichigan.com.

Learn more about how you can alert AAA to fraud online

Check back often for updates on Michigan Auto Insurance Reform. AAA will be here to help you make an informed decision on your auto insurance policy.

What You Can Do

There are simple steps you can take to optimize your coverage and your costs. Read on for advice and tips on how to manage your auto insurance effectively.

How can I optimize my coverage?

Understand your risks and needs

Every driver is different; what you need from your auto insurance policy may be different than what your neighbor requires. It's important to talk to your AAA agent to properly weigh all of the factors that affect the policy you buy

And if you make any major life changes, give us a call. Moving, a change in marital status, or a child leaving the household — these are all opportunities to reevaluate your coverage to see if we can potentially save you even more on your insurance.

Making your policies work together

If you have health insurance, you may be eligible for a Coordinated auto insurance policy that is less expensive than a traditional auto insurance policy. This means that if you're injured in an accident, your health insurance will pay first, instead of your auto insurance.

What affects my rates?

Your auto insurance premium is about more than your driving. Below are five factors that may affect your insurance rate.

  1. When selecting coverages, consider assuming some of the risk by selecting higher deductibles options.
  2. Enroll in the AAADrive™ Insurance Discount Program and get a discount on your auto insurance through AAA. The better you drive, the more you save. Learn More
  3. Maintain good grades. Young drivers may qualify for a discount having good grades.
  4. When purchasing a vehicle, consider the vehicles safety features and ability to repair with readily available materials. You receive a discount for having Airbags or Anti-Lock brakes.
  5. Review payment plan options. Many companies offer discounts for customers that pay in full or use EFT.

What do I do in case of an accident?

Anytime you are in an automobile accident, your safety is the most important consideration. Pull over to a safe area immediately. If anyone is injured, call 911. Then, call us to report the accident and arrange for assistance. Capture accurate information of the accident, including photos with your smartphone if you have one. Write down what happened and names, addresses, and phone numbers of those involved. Get names of any witnesses and be alert to fraud schemes.

AAA recommends that you never provide your personal information to anyone other than the other driver, police, and ambulance attendants. If someone else contacts you at the scene or hospital to ask you about potential injuries, contact your insurance agent immediately. Never provide information to anyone showing up at your home or calling you, unless you are aware of his or her identity.

Insurance underwritten by one of the following companies: Auto Club Insurance Association, MemberSelect Insurance Company, Auto Club Group Insurance Company, Auto Club Property and Casualty Insurance Company, and non-affiliated insurance companies.

1 Source: © 2018 National Association of Insurance Commissioners (NAIC).
Note: Data as of 2016. Total written premium/liability car years. A car year is equal to 365 days of insured coverage for a single vehicle. The NAIC does not rank state average expenditures and does not endorse any conclusion drawn from these data.

2 Source: Insurance Research Council.

3 Please note that certain PIP coverage options have eligibility requirements that apply to the named insured and all resident relatives and may vary depending on the option. Please see the No-Fault Act for complete details. This summary is being provided for general information purposes only. Subject to regulatory approval. Coverage is subject to eligibility, terms, conditions, exclusions and limitations.

4 Unlimited: Insured may select unlimited PIP AE Coverage with MCCA involvement. This is the coverage required by law in Michigan prior to No-Fault Reform.

5 $250,000 PIP Exclusion: Individuals who qualify for this option will not be charged a PIP premium by their auto insurer. If an individual chooses this option, and they are injured in an automobile accident, their medical benefits will be covered by their Qualified Health Coverage (QHC) provider. Individuals who purchase this option will not be eligible for PIP Allowable Expenses. QHC is health or accident insurance that does not exclude or limit coverage for injuries related to auto accidents and has a deductible of $6,000 or less per person. Insureds who have QHC, or their spouse or resident relative(s) in the same household who have QHC or are enrolled in Medicare Parts A and B are eligible. If not all household residents are eligible, it is still possible to elect this option, with the exclusion applying only to eligible individuals.

6 Allowable Expenses $50,000 – Medicaid Only: Allowable Expenses coverage option for insureds enrolled in Medicaid. A spouse and/or resident relative(s) in the same household must also be enrolled in Medicaid, be enrolled in Medicare Parts A and B, have other PIP Allowable Expenses coverage, or have QHC.

7 Allowable Expenses Opt-out – Medicare Only: In order to choose a $0 limit, insureds must be enrolled in Medicare Parts A and B. However, a spouse and any resident relative(s) in the same household must also be enrolled in Medicare Parts A and B, have other PIP Allowable Expenses coverage, or have QHC. Insureds will be required to provide documentation showing that they, their spouse, and any resident relative(s) are eligible in order to elect this option.