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More Michigan drivers choose PIP levels other than unlimited, according to new data

Consumers exercising choice given to them by bipartisan auto no-fault reforms


LANSING, Mich. — More than one out of every four drivers across Michigan are selecting personal injury protection (PIP) coverages other than unlimited, according to new data released today by the Insurance Alliance of Michigan.


Michigan is the only state that still offers an unlimited PIP benefit. The next highest mandatory minimum is New York at $50,000 in PIP benefits.


Prior to the 2019 auto no-fault reforms, all Michigan drivers were forced to purchase unlimited, lifetime medical benefits with their auto insurance, regardless of whether the benefits fit their budget or their family’s needs. The new data continues to show the success of the 2019 bipartisan auto no-fault reforms as consumers are picking the PIP coverage that best fits their needs and their budget.


According to IAM member company data this spring, over 28% of drivers ─ over 2.5 million people ─ chose a level of medical coverage less than unlimited. Over the prior year, that number has increased by more than 565,000 drivers ─ or almost 5% ─ in the state. Insurers representing 90% of the auto insurance market in Michigan responded to this survey.


“Michigan drivers continue to exercise their choice when it comes to matching the Personal Injury Protection coverage that suits their budget and needs,” said IAM Executive Director Erin McDonough. “Bipartisan auto no-fault reforms have saved drivers more than $6.5 billion since they took effect five years ago, according to an independent analysis. More than 200,000 previously uninsured drivers have purchased auto insurance and Michigan has moved away from being the most expensive state in the country to buy coverage, despite still having the highest benefits available for consumers. Efforts to undermine auto no-fault reforms are estimated to increase costs for all drivers and will reduce the value of the PIP benefit for over 2.5 million Michiganders who are purchasing coverage other than unlimited. That is why we urge lawmakers to remain focused on the millions of Michigan drivers who will undoubtedly be affected by changes to the law.”


The largest change occurred with approximately 250,000 additional Michigan drivers choosing $250,000 in PIP coverage over the prior year. Over 100,000 additional drivers chose $250,000 with exclusions and an additional 86,000 opted out entirely. 


Michigan mandates that drivers purchase the highest coverage limits in the nation. Even under the 2019 reforms, $250,000 per person/per accident in PIP benefits is the lowest coverage most drivers can choose in Michigan, which is five times higher than any other state mandate. Those customers on Medicare, or with certain “Qualified Health Coverage” as defined by the law, can opt-out altogether. Those customers on Medicaid are able to choose a PIP limit of $50,000 per person/per accident. New York mandates $50,000 which is the next highest in the nation.    


Michigan’s other mandated auto insurance coverage, bodily injury liability, has a default mandate of $250,000 per person/$500,000 per accident, which is five times higher than any other state requirement.  Please see the attached document for a 50-state comparison.


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