Michigan has reforms to the no-fault car insurance policy starting July 1, 2021. Here's what you need to know.
Michigan is a no-fault state and has some of the most expensive car insurance rates. In an attempt to reduce the financial burden on policy-holders, lawmakers in Michigan have been enacting reforms to the no-fault car insurance policy over the last few years, and new changes are coming down the pike starting July 1, 2021. It’s crucial to understand these new laws to choose the best coverage for your needs. It might be wise to consult a comprehensive guide, such as Michigan’s guide to Auto Insurance. It’s complex, but exploring some of the most critical aspects of these changes gives you a head start in your decision-making.
In theory, no-fault laws are there to protect you and ensure you receive proper medical attention if you’re injured in a car accident, regardless of who was at fault. However, in practice, this meant that Michigan drivers were mandated to pay for unlimited personal injury protection (PIP) medical benefits, which were intended to cover all the injured person’s reasonably necessary medical care, treatment, recovery, rehabilitation, home health care aides, etc., for an indefinite period. The first change to this policy took effect on July 1, 2020. It allowed Michigan motorists to choose different levels of PIP coverage.
Michigan Residents are now allowed to select PIP coverage of $50,000 (if you’re enrolled in Medicaid.) Non-Medicaid holders can choose $250,000 or $500,000 in PIP coverage. The reduction in cost for Medicaid recipients is based on the rationale that if you’re injured in a car accident, your health insurance will be responsible for covering your treatment rather than your car insurance policy. Medicare insurance recipients are allowed to opt-out of PIP coverage entirely. However, anyone can still opt for unlimited PIP.
However, there may be some drawbacks to selecting a limited PIP option. Those who are seriously injured in a car accident and not already on Medicare or Medicaid could face a situation where their health insurance caps. If they have health conditions that require continued care indefinitely, they may be forced onto Medicaid to cover their care. While this won’t cost them more, their resources will have to be limited to qualify and continue to receive these medical benefits. This could be problematic if they have financial resources over Medicaid limits.
The most significant change occurring on July 1, 2021, has to do with coverage for home health care. The new law stipulates coverage of only 56 hours per week of home care is allowable if provided by a relative, friend, business a-sociate, or anyone living in the same household as the injured party. The prior law allowed for the coverage of 24-hour care for those catastrophically injured in a car accident. However, the new law doesn’t apply to attendant care provided by commercial agencies.
/cloudfront-us-east-1.images.arcpublishing.com/gray/KR7WZNAXOZELTNCGCDKY3BPBFQ.bmp)
GST taxpayers can't claim any pending input tax credit if this return is not filed by November 30, 2024 for FY 2023-24
