On June 11, 2019, the new No-Fault law was passed by the Michigan Legislature, which we will see most of its impacts beginning July 1, 2020. There are many driving factors that drove the new Michigan No-Fault law into fruition. It transforms Michigan’s auto No-Fault insurance law, which will result in substantial changes for decades to come.

No-Fault PIP Choice

Drivers will no longer be obligated to purchase unlimited No-Fault Michigan PIP benefits. Those who purchased policies after July 1, 2020, can choose between these No-Fault medical benefit coverage levels: $50,000 (if a driver is enrolled in Medicaid); $250,000; $500,000; or “no limit.” Drivers with Medicare can decline coverage for No-Fault PIP medical benefits.


The public outcry over the high costs of auto insurance pressure motivated many politicians to lower auto insurance prices. The new law promises significant savings that drivers will see in the medical portion of their premiums.

However, these savings are limited only to the No-Fault PIP portion of the bill, not its entirety. The PIP portion is estimated to be approximately 35%-44% of total premium, so for many drivers, this new law might not make too much of a difference in price.

Michigan Catastrophic Claims Association (MCCA)

Under the new law, the MCCA continues to be liable for catastrophic injury benefits where drivers have opted to maintain unlimited No-Fault PIP medical benefits. Michigan Auto Law Attorneys  stated that those who cap their No-Fault benefits or opt-out will still be required to pay annual MCCA assessments. The MCCA will refund drivers if assessment proves that MCCA assets exceed 120% of the MCCA’s liabilities.

Medical-provider Fee Schedule

A Medicare No-Fault fee schedule will govern charges from any provider who cares for and treats car accident victims. Depending on the type of facility involved, reimbursement will range from 190%- 250% of the amount payable under Medicare.

Rate Factors

Auto premium rates will no longer be based on non-driving factors such as sex, marital status, home ownership, education level attained, occupation, the insured residential postal zone and credit score.

Liability Limits

Under the new law, minimum limits will be increased to $50,000 and $100,000, with a residual bodily injury limit of $250,000 and $500,000 offered to drivers.

Excess Medical Benefits

Car accident victims will be able to sue for excess medical costs and economic expenses, such as those that exceed the dollar amount of the No-Fault PIP cap amount selected.

The coverage amount available to the negligent driver becomes much more important. Excess medical benefits lawsuits will become a concern after the new No-Fault PIP choice levels become available.

Pain and Suffering Compensation

Car accident victims will be required to satisfy the new definition of a “serious impairment of body function” in order to be able to sue for pain and suffering compensation. This is circumstantially based and requires comparison of the injured person’s life before and after the incident. 

About Thayer Innes and Freeman Bunting Insurance Agencies

At Thayer-Innes Insurance Agency and Freeman Bunting Insurance Agency, we strive to provide comprehensive insurance solutions to support Ann Arbor homeowners. Our homeowners’ policies can be tailored to meet your specific risk exposures and provides much more coverage than a traditional policy, giving you the peace of mind you deserve. For more information about our products, contact us today at (855) 395-6316.