Michigan drivers continue to operate under significant changes to the Michigan No-Fault Auto Insurance law, which took effect July 1, 2020. These changes are still in place as of 2025, with periodic updates to fees and requirements.
No-fault reform can be complex. This page is designed to help Michigan drivers understand the updated rules, including options for Personal Injury Protection (PIP) coverage and their potential impacts.
A 3-minute video rundown: Michigan No-Fault Auto Insurance Changes for 2020 - Intro
What is Michigan's No-Fault Auto Insurance Law?
Michigan’s No-Fault auto insurance law primarily affects the Personal Injury Protection (PIP) portion of your auto policy. Before 2020, drivers were required to carry unlimited medical benefits.
After the reform, Michigan drivers can now choose their level of PIP coverage, which can have a significant impact on both premiums and out-of-pocket costs in the event of an accident.
Key Changes Since 2020:
- Drivers now select a specific PIP coverage limit that fits their needs and budget.
- New, higher minimum limits for Bodily Injury Liability coverage are required.
- Revised rules about coverage for household members, including college students and non-owner drivers.
- Annual Michigan Catastrophic Claims Association (MCCA) fees are updated regularly and vary based on PIP coverage level
When Did Michigan's No-Fault Law Change?
- Signed into law: May 30, 2019, by Governor Gretchen Whitmer
- Effective for renewals: On or after July 1, 2020
- All current Michigan auto policies must comply with these rules unless further changes are made by legislation.
What is Personal Injury Protection (PIP)?
PIP provides medical and rehabilitation benefits if you're injured in an auto accident, whether temporarily or permanently.
Since July 1, 2020, you can choose your coverage amount, ranging from unlimited coverage (the previous Michigan standard) to lower levels or even waiving PIP coverage altogether if you qualify.
PIP appears as a specific line of coverage on your insurance declarations page.
What are the Personal Injury Protection (PIP) Choices?
Michigan drivers can now choose from the following PIP coverage levels:
- Unlimited coverage
- $500,000 limit
- $250,000 limit
- $250,000 limit with PIP medical exclusion(s) (for those with qualified health coverage)
- $50,000 limit (only for Medicaid enrollees)
- PIP medical opt-out (only for those with Medicare Parts A & B and household members with qualifying coverage)
If you do not select a PIP option, unlimited coverage is the default
Let's use an example of a vehicle's yearly PIP premium being $250 and apply the reduction to the different PIP coverage levels drivers can choose from. These figures are for illustrative purposes only and may not reflect your actual premiums or savings.
| COVERAGE LEVEL | PIP PREMIUM ROLLBACK | YOUR YEARLY SAVINGS |
| Unlimited PIP Benefit | 10% PIP reduction | $25 |
| $500,000 PIP Benefit | 20% PIP reduction | $50 |
| $250,000 PIP Benefit | 35% PIP reduction | $87.50 |
| $50,000 PIP Benefit (must be enrolled in Medicaid) | 45% PIP Reduction | $112.50 |
| Medicare Opt-Out (must be enrolled in Medicare Part A & B) |
100% PIP reduction | $250 |
| Qualified Health Coverage Exclusion | 100% PIP reduction | $250 |
*All members of the household have other health/accident coverage that does not exclude or limit coverage for injuries related to an auto accident and has an annual deductible of $6,000 or less per individual.
These examples are for illustrative purposes only and may not represent actual premium changes.
How Can I Change My PIP Choices?
You must review and sign a form issued by Michigan’s Department of Insurance and Financial Services (DIFS) selecting your desired level of coverage. This form details all available options. Insurance agents and insurers are required to provide this form, which you must sign for your policy to be valid.
The new law requires insurance agents and insurers to provide this form, which you must sign. We recommend consulting with your attorney for advice specific to your situation.
If I Don't Want to Change From the Unlimited PIP Option?
You must still review and sign the DIFS form, regardless of your PIP choice. Policies effective July 1, 2020, or later will default to the $500,000 PIP level unless you specifically elect a different option. If you want unlimited coverage, you must select this option on the form.
What is the Impact of Reduced Coverage in an Accident?
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With unlimited PIP, all reasonable medical expenses from a covered auto accident are paid, with no lifetime maximum. The Michigan Catastrophic Claims Association (MCCA) reimburses your insurer for claims above a set threshold (currently $635,000 in 2025).
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With lower PIP limits, your insurer pays up to your selected limit. After that, your health insurance (if it coordinates with your auto policy) may pay, subject to your deductible and other terms. If not, you may be responsible for excess costs.
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If you opt out with Medicare or a Qualified Health Coverage Exclusion, all accident medical bills are processed through your health plan or Medicare.
What is Bodily Injury Liability (BI)?
Bodily Injury Liability (BI) is auto insurance coverage that pays for injuries a driver causes to other people, including other drivers, passengers, and pedestrians. This part of your auto insurance policy covers medical expenses, lost wages, and pain & suffering up to your policy limit.
Previous minimum BI coverage option (before July 2020):
- Up to $20,000 for a person hurt or killed in an accident
- Up to $40,000 for each accident if several people are hurt or killed
- Up to $10,000 for property damage in another state.
Current minimum BI coverage requirement (as confirmed with Michigan DIFS):
- Up to $50,000 for a person hurt or killed in an accident
- Up to $100,000 for each accident if several people are hurt or killed
Suppose there is a valid Michigan No-Fault policy in place. In that case, coverage applies to the injured party and passengers involved in the auto accident as long as it occurs in the United States or Canada (must be named insured or spouse/resident relative).
Additionally, there are options to elect higher BI coverage of:
- $250,000 / $500,000 or
- $500,000 / $1,000,000 if you choose.
Will Changes in Auto Insurance Affect Family Members Who Drive My Car?
There has been a change regarding coverage of a "resident relative of the household." Consider the following scenarios:
- Do you have children (such as college students) using a vehicle titled in your name but have established residency elsewhere?
- Do you live with someone (who is not a spouse or relative) without insurance but driving a vehicle titled in your name?
If you answer "yes" to either question, these individuals may no longer be covered under your auto policy. This change became effective on June 11, 2019. Claims processes and notification of these changes will vary by the insurance company.
You may want to consider a Named Non-Owned auto policy. This type of policy can be purchased per driver.
What is a Named Non-Owned Auto Policy?
A Named Non-Owned auto policy covers a driver who doesn't own a car but has auto insurance. It's a liability policy in the event this driver has an accident with another driver and is found to be at fault.
This type of policy provides liability coverage for bodily injury and property damage purchased per driver.
A Named Non-Owner policy can protect individuals who do not own a vehicle that's titled and registered in their name. Protection for liability is important even if they do not own a vehicle.
Many things can go wrong when driving, and a non-owner policy would provide protection if they borrow a friend's or family member's vehicle.
Will My College Students' Living Situation Raise a Red Flag?
Full disclosure to your insurance company is essential. Lack of disclosure can put your entire policy at risk of being rescinded. Being honest with your agent is a contractual obligation. Your agent is available to explain the options and coverage that will fit your unique situation.
What's the Difference Between "Under-Insured" and "Uninsured"?
Under-Insured
Under-insured refers to coverage that steps in when you're in an accident with an at-fault driver whose liability limits are too low to cover the liability or medical expenses.
Uninsured
Uninsured motorist coverage protects you if you're in an accident with an at-fault driver who lacks automobile insurance.
How does the Michigan Catastrophic Claim Association (MCCA) Work?
The MCCA collects annual per-vehicle fees to reimburse insurers for catastrophic claims above a set threshold. As of July 2025:
- $82 per vehicle for unlimited PIP coverage
- $23 per vehicle for other PIP coverage levels
- Please verify current rates at www.michigancatastrophic.com, as these amounts are adjusted periodically.
The MCCA reimburses insurers when a claim surpasses $600,000. For drivers with unlimited PIP, this creates seamless coverage with no lifetime maximum.
How Do I Know if My Health Insurance Coordinates With My Auto Policy?
Contact your healthcare provider and speak with a customer service agent. Ask specifically if your medical insurance will provide care in the event of an auto accident.
What If I Reach My PIP or BI Limit?
Once you've reached your coverage limit under your policy's PIP and BI lines, an injured party can come after your personal assets. An umbrella policy might be a reasonable consideration for your situation.
Would an Umbrella Policy Help?
An umbrella policy is just what it sounds like-it's an additional policy that covers you. It provides extra liability insurance that extends beyond your current auto (home or watercraft) insurance limits and protects your net worth.
What If I Have a Previous Injury?
Suppose you are already receiving payments from an auto accident that occurred in the past or an accident between now and July 1, 2020. In that case, you will continue to receive the current unlimited benefit, regardless of the PIP amount you choose in the future.
What Happens If I'm in an Accident with an Uninsured Driver and Have Limited PIP?
If you choose limited PIP coverage and are involved in an accident with an uninsured driver, your situation depends on several factors:
- Your PIP coverage (up to your limit) will apply first.
- After exhausting PIP, your health insurance (if it coordinates) may cover further costs.
- For pain and suffering damages, you may need to pursue the at-fault driver via a lawsuit, which can be challenging if they lack sufficient assets or insurance.
What If I Have More Questions?
First, all Michigan residents are working through this historic change together. We're right there with you.
Additionally, feel free to contact us at info@mason-mcbride.com or at (248) 822-7170 to speak to our knowledgeable staff, who are happy to answer your questions regarding your auto insurance needs.
DISCLAIMER
The information contained in this FAQ is provided for general informational purposes only and should not be construed as legal, financial, or insurance advice on any subject matter. The examples, estimates, and suggestions presented in this material have been developed from sources believed to be reliable, but we make no warranty or representation regarding their accuracy or applicability to your situation.
All coverage descriptions and details are subject to policy terms, conditions, exclusions, and applicable laws and regulations which may change from time to time. The exact coverage provided is subject to the language in the actual insurance policies issued.
Please consult your specific insurance contract for actual terms, coverages, amounts, conditions, and exclusions.