Personal Injury Protection (PIP) law is approaching!

The countdown to conform to the new no-fault law has already begun. On May 30, 2019, Michigan lawmakers passed legislation to reform the Auto Insurance market, impacting every driver in the state. The new law will include substantive changes to PIP coverage and tort liability, transforming Michigan into a mixed no-fault and tort state as of July 2, 2020.

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Impact of the new PIP law changes on Insurance Carriers

  • Introduction of the 5 new coverage options: Topline might take a hit due to roll back rates for at least 8 years, Lower owing to avoidance of medical claims, fraud, and legal battles, Frequency of catastrophic claims might increase
  • Increase in liability coverage: The cost of Auto Insurance will increase. It will have positive impact on topline of carriers
  • New Medical-provider fee schedule: Legal battles between carriers and medical provider will decrease and Carriers would gain more transparency in the costing
  • Ban on usage of Non-driving factors: Insurers will have to adjust pricing formulae on how the costs will be distributed to individual drivers and Annual mileage and driving record could carry more weight
  • Reduction in MCCA adjustment fees from $220 to $43: Carriers will be able to provide more affordable insurance products

Impact of the new PIP law changes on Insurance Drivers

  • Introduction of the 5 new coverage options: Premiums will be lowered making Insurance affordable for drivers and Prices of non-PIP part of Insurance might increase
  • Increase in liability coverage: Increase in liability cost could cut into savings drivers would see from PIP reductions
  • New Medical-provider fee schedule: Savings due the schedule will be passed to drivers thus reducing premiums
  • Ban on usage of Non-driving factors: Drivers will gain more privacy and safety of personal information
  • Reduction in MCCA adjustment fees from $220 to $43: Drivers can expect savings due to reduction in adjustment fees
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