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No-Fault Reform Update

We understand the no-fault reform can be confusing, and its unclear what coverage you need, or how much it’ll cost. We can help.


Personal Injury Protection (PIP) is a large part of the Michigan No-Fault Reform. What is PIP coverage?

If injured in an auto accident, Personal Injury Protection (PIP) provides coverage for all reasonable and necessary medical expenses for the injured person’s lifetime up to the maximum coverage amount selected on their policy. PIP will also pay for wage loss and replacement services for up to three years after the date of the accident.  

For more information, please see a brief explanation of no-fault insurance from the State of Michigan. 


What is the difference between PIP coverage and Health Insurance?

PIP offers coverage that health insurance does not, such as:

  • Wage Loss – Loss of wages the injured person would have earned if they had not been hurt, for up to three years.
  • Replacement Services – Payment for services the injured person is no longer able to provide because they are injured, such as housekeeping and yard work.
  • Attendant Care – Services rendered to care for an injured person including long-term care.
  • Home and Auto Modifications – Such as wheelchair lifts and/or ramps.

Individual or group health insurance coverage may be subject to coinsurances, copayments, and deductibles; under the no-fault law insureds would not be subject to those out of pocket expenses. With the upcoming no-fault PIP reform insureds will have the ability to choose unlimited coverage to avoid those expenses and not be subject to deductible, copayment or coinsurance requirements. However, additional levels of coverage are available that may result in the expenses listed above. 


Claim Example:

Four teenage boys returning home from a high school sporting event, were driving too fast and lost control of their vehicle and sent it off the road and into a ditch. One passenger was severely injured and required life flight, extended hospital stay, several surgeries and a lifetime of care.  Total claims expenses exceeded $1,900,000 with continued claim costs still being paid to date. Over $900,000 worth of expenses would NOT have been covered under health insurance leaving a significant gap in coverage.

Read more to understand how an auto policy would pay according to the various PIP options.


Kapnick Recommendation:

Kapnick Insurance Group advises all clients to select the unlimited PIP option, elect higher limits liability, and purchase a personal umbrella to best protect themselves and their assets. Our recommended coverages include:

  • Minimum of $500,000 per accident/$500,000 per occurrence Bodily Injury Limits
  • Minimum of $500,000 per accident/$500,000 per occurrence Uninsured Motorist Coverage
  • Minimum of $500,000 per accident/$500,000 per occurrence Underinsured Motorist Coverage
  • Minimum of $500,000 Property Damage Coverage
  • Unlimited PIP
  • Minimum of $1,000,000 umbrella policy
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