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Auto Medical Coverage

By January 1, 2020May 13th, 2020No Fault Auto Reform, Personal Insurance
Medical Costs from Auto accidents, woman handing a doctor money

(2 minute read)

Auto Reform is causing the word PIP to be thrown around more than normal lately.

So what is it???

PIP stands for Personal Injury Protection.  It is a mandatory coverage on every Michigan auto policy.  It covers medical expenses if you or a resident relative of yours is injured in/by an automobile.  It doesn’t matter who causes the accident, your policy covers YOU!  This is why our auto insurance is referred to as a “no-fault” system.  Currently, there is no choice for this coverage. You have it, period.  So, it rarely gets discussed and is often the least understood (and least appreciated) coverage on your auto policy.  With Michigan No-Fault Reform laws going into effect July 1, 2020, it’s time to appreciate what PIP provides – especially if you are thinking of lowering PIP limits on your policy or giving them up completely.

It’s SO MUCH MORE than just “medical coverage”

PIP covers your medical expenses like a personal health policy would, but without the co-pays or deductibles a personal health plan likely requires or the “out of network” complications.  PIP is designed to address the real-world costs from auto accident injuries, making the coverage more broad and generous than personal health plans like Blue Cross, Medicare, etc.

The following is an impressive (and incomplete) list of what PIP covers:

  • Medical treatments, surgeries, MRIs, X-rays, CT-scans, physical therapy, psychotherapy, cognitive therapy, prescription medications, rehab, etc.
  • Transportation needed to get treatment.
  • Medical, physical and vocational rehabilitation services, such as counseling, job training and retraining, and job placement.
  • In-home attendant care services
  • Home and vehicle modifications to accommodate physical limitations
  • Medical equipment including wheelchairs, prosthetic limbs, etc.
  • Guardian and/or conservator expenses for accident victims whose injuries leave them legally incapacitated
  • Case manager (patient advocate)
  • Other items deemed “reasonably necessary” for your care, recovery, and rehabilitation
  • Wage loss/death benefit
  • Burial expenses
  • Replacement services
  • Long term care services (potentially a huge expense)

Unlimited PIP is not limited by time or money.  Most personal health policies have limits of some kind.  If the injured individual is living and dealing with medical issues related to the auto accident, the PIP covers them.

The Risks in Giving Up Unlimited Personal Injury Protection (PIP)

People who choose a PIP limit or the PIP opt-out option could find themselves in the unenviable position of having to pay hundreds of thousands of dollars out of pocket to cover their medical and related expenses, or they could be forced to sue someone to get their medical costs covered from an auto accident if someone else was at fault.  You can’t sue a deer, for example.  Also, lawsuits take time… meanwhile, the medical expenses will be piling up.  None of this is good for your mental well-being or your financial future.

If you decide to keep your unlimited PIP coverage, your insurance premiums will very likely stay close to what you’re paying today.  If you decide to choose a limit on your PIP coverage or opt-out of PIP altogether, you could save an estimated $200 to $400 per year per vehicle (it could be higher or lower).  While this may appear attractive, think about the additional risk you’re taking on for you and the people who depend on you (your resident relatives).

Our recommendation:

Keep your unlimited PIP.  The savings are far outweighed by the risk of out-of-pocket expenses and the drama and strain of a lawsuit.  You’d be hard-pressed to find better coverage than this.  It’s time to appreciate what you’ve got with unlimited PIP and hang on to it!