To lower auto insurance costs, more Michigan drivers are giving up unlimited Personal Injury Protection (PIP) and choosing one of the lower PIP limits, with the $250,000 option growing in popularity. Others are also reducing optional coverages. While these changes can lower monthly premiums, it’s important to understand the trade-off: you’re accepting more financial risk if a serious accident occurs.
Your policy’s PIP medical coverage pays for vehicle-related medical expenses if you or a resident relative is injured in an auto accident, regardless of who caused the crash. You don’t have to prove fault or wait for a lawsuit before receiving benefits.
But what happens if a serious injury exceeds your PIP limit?
If your health insurance covers auto accidents, it may help with some medical expenses. However, it can still include deductibles, copays, provider restrictions, and coverage limitations. More importantly, health insurance doesn’t provide many of the benefits that PIP does, such as wage loss, replacement services, and certain long-term care expenses.
Some people assume they can simply sue the at-fault driver. Unfortunately, it’s not that simple. If you caused the accident, slid off an icy road, or hit a deer, there may be no one else to pursue. Even when another driver is at fault, proving liability can take months or years, and there’s no guarantee you’ll recover everything you’re owed.
The at-fault driver may carry low liability limits, have no insurance, or lack the personal assets to pay a judgment. That’s why Uninsured and Underinsured Motorist coverage deserves careful consideration. This optional coverage helps protect you if you’re injured by a driver who has little or no insurance.
A serious auto accident can impact both your health and your financial future. Unlimited PIP coverage, along with adequate Uninsured and Underinsured Motorist coverage, provides some of the strongest protection available to Michigan drivers. These coverages cost more, but after a catastrophic accident, they could be among the most valuable protection you ever purchase. Before reducing your coverage, have a good conversation with your insurance agent so you understand the trade-offs of lowered coverage on your insurance premiums and at claim time.