Michigan's-Auto Insurance-reform - June 11, 2019 and July 2, 2020 - Crawford Insurance Group

Michigan’s-Auto
Insurance-reform
      June 11, 2019 and July 2, 2020

Developed for our friends at
            Michigan CAI

Who thinks Michigan’s costs for Auto Insurance
                 is to high?
• Why the change?
• Fact- Michigan has the highest costs for auto insurance in the country!
• Michigan has one of the highest amounts of uninsured vehicles in the
  country, estimated at 35-40%!
• Our benefits currently go to many people that do not pay into the plan!
• Medical professionals can nearly charge whatever they want for auto
  related injuries

Personal Injury Protection- Currently what
                    /who is covered
•   Unlimited Medical and rehabilitation benefits – To Whom? Nearly everyone! Non- mi. driver’s insured in
    other states and injured in Michigan, Pedestrians and Bicyclists, Motorcyclists hit by another vehicle.
•   Survivor Benefits
•   Lost Wages-annual cap of $68,616, adjusted annually
•   Extensive in- home Attendant Care- 24-7-365
•   Door to Door medical transportation
•   Home and Vehicle modifications
•   Long-term cognitive and speech therapy
•   Custodial care in some Residential Rehab Centers

Those losing or reducing PIP Benefits-
                           July 2, 2020
•   Non –Members of the Household- Think of kids using parents or Grandparents vehicles July
    2020 some say June 11, 2019!
•   Non-Married individuals living in same household- When only 1 is Named Insured June
    11,2019
•   Drivers from other states, pedestrians, bicyclists and even motorcyclist hit by other vehicle
    that get injured no longer get to choose the unlimited PIP benefits! July 2, 2020

•   How can these people get any PIP benefits- submit claim to the MACP
•   MAIPF-operates the Michigan Assigned Claims Plan- Benefit capped at $250,000

July 2, 2020 PIP Medical Optional limits

•   Unlimited PIP Benefits, similar to the current limit, your carrier responsible for first $580,000, Michigan Catastrophic Claims Association
    (MCCA) thereafter!
•   Wage Loss and limited household replacement services are in addition to the PIP medical limit!
•   PIP Medical limits are per individual per loss occurrence
•   $500,000 PIP Medical Limit
•   $250,000 PIP Medical Limit
•   Medicaid- $50,000 PIP Medical Limit
•   Medicare Part A and B opt out!
•   Opt-out option-Must have health or accident coverage that does not exclude or limit injuries from auto accident- Individual Deductible no
    greater than $6,000 !

“Estimated PIP Cost Savings” July 2, 2020

•   Savings based on PIP rates effective May 1, 2019 and go forward the next 8 years,
    % savings are company averages not set individually
•   Unlimited Pip Benefit option-10%
•   $500,000 Limit -20%
•   $250,000 limit- 35%
•   Those that opt out pay zero PIP medical charges!
•   Everyone choosing lower limits from unlimited will be out of MCCA
•   MCCA has reduced rates per vehicle to $100 from $220!

Let’s look at a few examples of savings!

• Assume your annual Personal Injury premium is $700, and unlimited benefit
• Currently paying $220 per vehicle for the MCCA
• Unlimited 10% savings of Pip including the savings from MCCA
• $700 x 10%= $70, will max out savings from the MCCA of $120 vehicle
• Increased costs for Bodily Injury and un and underinsured motorist’s
  coverage.

Choosing $250,000 PIP Medical option

• Annual Pip premium $700, MCCA costs $22o
• Required 35% of pip savings including MCCA savings
• $700 x 35%=$245
• Would no longer participate in the MCCA, claims over $580,000
• Increased costs of higher bodily Injury and un and under insured motorists!

Additional Changes with Significant Impact

•   Rating limitations-Can’t base rates on non-driving factors as sex, marital status, home
    ownership or postal zones in which the insured resides and credit scores. (Insurance scores
    are allowed)
•   Fee Schedule-Begins July 2, 2021 continues to reduce amount Hospital and Medical
    professionals can charge versus the unlimited amounts they can charge today
•   No Prior Insurance- no longer refuse to offer, charging a fee or increasing premiums before
    1/01/2022
•   Mini Tort- Increases to $3,000
•   Motorcyclists- Previously unlimited benefit from vehicle they collided with- changes to the
    limit the other vehicle chooses regardless of the limit they choose

Continued Changes coming July 2, 2020 to
                  your Auto policy
•   Bodily Injury liability exposures increase greatly-If 51% at fault or greater you will now be liable to the injured party or
    parties! Due to their decision to choose lower PIP limits!
•   Minimum Bodily Injury limits from 20,000/40,000/ 10,000 to 250,000/ 500,000/10,000 MCLA 500.3009
•   Combined BI Single Limit minimum $510,000 including $10,000 for property liability can go to $100,000 with signature on
    new form
•   Limited compensation for attendant care services 56 hours a week, MCL 500.3157
•   Information you will need to provide to your agent or insurance carrier!
      •   Pip Option
      •   Name of all employers and their address for each driver
      •   Verification that health carrier covers auto accidents
      •   Bodily injury and un and under insured limit you choose

Un-Answered or being negotiated as of 10-28-
                   2019
•   Did the changes that were to go into effect 6-11-19 do so-Bills SB1 and HB 4397
•   Specific rating limitations
•   Pedestrians, passengers, bicyclists not otherwise-insured- capped at $250,000 limit thru
    MACP effective July 2, 2020.
•   If you choose lower limit of PIP because you have health coverage and lose it- 30 days to
    inform 2 million limit from MACP day 31 no coverage if do not contact agent or insurer!
•   Required to sign forms every year going forward you know what your buying, if not
    returned automatically renews at unlimited benefit and if on EFT pulls that amount!

Our Recommendations Going Forward

•   If you can afford it and do not have health care stay at the Unlimited Medical PIP
•   Increase your bodily injury and un-Under insured limits to as much as you can
    afford
•   Purchase or perhaps increase your Umbrella
•   Contact your agency 45 to 60 days prior to your 7-1-2020 renewal
•   Contact your agency immediately if you have drivers out of the household driving
    your vehicles or living together and both parties are not named insureds
•   No longer title vehicles in your name for your children out of HH – except college!

The Crawford Insurance Group

•   Mission-”Empowering our employees, clients and communities to successfully navigate the
    unexpected!”
•   Vision-”To be sought after throughout the country for our trusted expertise and renowned
    for our steadfast allegiance to the communities, clients and carriers we serve!”
•   Values- “Integrity-Expertise-Dependable-Engagement-Passion”
•   1415 Walton Blvd. Rochester Hills Mi. 48309
•   www.CrawfordInsurancegroup.com
•   248-402-5005