In July 2020, the Michigan Auto Reform took effect, which created additional insurance options for personal and commercial drivers. If you haven’t already, you will receive two different forms before your policy renews, giving you the option of changing coverage. In this blog, I’m going to talk about what to do with those forms, whether you’re changing or keeping your coverage the same.
Form #1: Bodily Injury Limits
Bodily injury liability insurance covers claims made against you for injuries to others if you are at fault in an auto accident. The first form titled, “Michigan Choice of Bodily Injury Liability Coverage Limits” should be ignored to maintain your highest level of coverage.
We recommend that you continue to maintain at least a $1,000,000 Combined Single Limit.
Form #2: Personal Injury Protection (PIP) Limits
Personal Injury Protection (PIP) pays expenses for your care, recovery, rehab, wage loss and replacement services like lawn maintenance, housekeeping, and home maintenance. The form is divided into three sections: Section A will review your PIP Medical coverage options, Section B will ask you to choose your coverage option, Section C will ask for initials and a signature to confirm your selection. Again, this form should be ignored to maintain your highest level of coverage.
We strongly urge our clients to maintain “unlimited” coverage for Personal Injury Protection (PIP).
The Dollars and Cents
Let’s talk insurance premium. I’m sure many of you are curious about the possible premium savings that these changes may generate, but we know the minimal savings does not compare to the exposure you would be creating. As an organizational leader, you can’t afford to carry anything less than the coverages you currently have.
In 2011, an employee of one of our church clients was involved in a rollover car accident, resulting in spinal, brain and optical injuries. Since the accident, the employee now requires living services and other mental supports. Expenses related to the accident have reached $550,000 and continue to rise. Without unlimited PIP, the injured employee could be paying out of pocket medical expenses.
Our Recommendation As Your Insurance Advisor
You should ignore the forms and renew your coverage ‘as is’, with the highest level of coverage. If you have any specific questions regarding auto reform or any insurance related questions, please don’t hesitate to reach out anytime!