ESCANABA — After July 1, Michigan auto insurance will change and drivers who renew their policy or start a new one will reap the monetary benefits.

Michigan drivers will be able to decide the level of medical coverage — Personal Injury Protection (PIP) — on their next policy. PIP pays allowable expenses to the insured for medical care, recovery, rehabilitation, and some funeral expenses after an auto accident.

On May 30, 2019, Gov. Gretchen Whitmer signed auto no-fault legislation to lower costs for Michigan drivers. The bill reformed Michigan’s auto insurance system by guaranteeing lower rates, allowing drivers to choose their own PIP, banning insurance companies from using non-driving factors to set rates — ZIP code, credit score, gender, marital status, occupation, education level, and owning a home — and setting a fee schedule for medical establishments to prevent overcharging a driver for auto-related injuries.

Klein Agency Insurance Agent Theresa Klein said the new law will benefit customers, but advises they need to check their health insurance or medical supplement before deciding on their level of PIP.

“It is still left up to the individual to make sure they are covered in the case of an accident,” said Klein. “They need to check with their health insurance or medical supplement before they make their decision. We know that Medicare does pay in the event of an accident but Medicare has limits on some coverages.”

Klein said there are two things every insured person should know before they decide — if their health insurance covers them in the event of a car accident, and their deductible is $6,000 or less.

“Customers should call their plan and verify those two things before they decide what they want to do,” she said.

Currently PIP coverage accounts for almost half of an insurance premium. Starting in July, PIP premiums will be reduced under the new Michigan law. The average reduction per vehicle in premiums depends on the amount of PIP coverage chosen by the insured driver. There are six coverage levels available, according to the website www.Michigan.gov/autoinsurance — Unlimited (16.5% reduction), up to $500,000 (36.3% reduction), $250,000 with PIP medical exclusions (41.9% reduction), up to $50,000 (54.3% reduction), and a PIP medical opt-out. If an insured does not choose a PIP coverage, the Unlimited PIP medical option will be selected by default. Michigan is the only state offering unlimited PIP coverage.

Agents have trained since March to be ready and able to help clients make the best personal decision. Due to COVID-19 agents were unable to train face to face, and had to use online classes.

Bergman Insurance Agency Licensed Agent Tiffany St. Louis said training for the new law hasn’t been smooth.

“We are still learning about the ins and outs of the new law. We were suppose to have face-to-face training, but the in-person training was canceled because of COVID-19,” said St. Louis. “There are training modules online, but it’s not the same.”

Klein said she is glad to open their doors after weeks of working from a computer and phone. Signatures from customers would get a bit difficult and explaining insurance information is much easier in person. Klein said she has noticed some customers are getting PIP and bodily injury insurance confused.

“People do mix up bodily injury and personal injury. Bodily injury insurance is if you hurt somebody else. We encourage them to keep high limits on that, if someone else would sue you,” said Klein. “According to Michigan law, drivers have to insure $50,000 per person.”

The Michigan Department of Insurance and Financial Services (DIFS) will verify insurance companies are not using illegal rate factors to determine insurance premiums, and a new fraud investigation unit will investigate fraudulent activity. Auto insurance rates must be filed with the DIFS before being offered to customers. Insurance companies, agencies and licensed agents may find increased fines if they violate the new law.

The new insurance paper work can be confusing for anyone. Drivers should consider other health/disability policies they hold before choosing PIP coverage and verify the policy provides benefits for injuries related to an auto accident.

“Do the research with your health insurance provider,” said Klein. “It is affecting how customers make their decisions, how much will come out of their pocket.”

St. Louis agrees, talking with your agent will help you navigate through the change in insurance.

“Talk to your agent on the new laws and how the laws can affect you,” said St. Louis. “Make the right choice according to the medical coverage you have.”

Compare premiums, limits, and deductibles to ensure quotes are comparable between insurance companies. Refer to your policy contract and ask your agent.

“That’s what we’re here for, customer service. Call and stop in at any time,” St. Louis said.

DIFS’ no-fault hotline, 833-275-3437, is available Monday through Friday, 8 a.m. to 5 p.m. For further information email autoinsurance@michigan.gov, or visit www.michigan.gov/autoinsurance for details, a schedule of weekly town halls, and instructional videos on how to fill out forms.