OT: Car Insurance Costs in MI
First post -- hope its a practical one for you all.
Given the new car insurance laws in Michigan come July 1st, anyone considering changing their Personal Injury Protection (PIP) coverage on their car insurance?
As an employee of the University with their self-funded staff health insurance, I think they cover medical insurance as primary (with no limits), so I might be able to deny PIP and save a decent chunk of change.
That being said, both University HR and the payer are being really opaque and are reading off "scripts"
Anyone else working through this? It's just like cord cutting, but for your car insurance.
I just took a continuing professional education course on this. As I understand the changes, this year will not yield a significant amount of savings based on the PIP election. I would be careful about assuming that any self-funded plan covers auto as primary in an unlimited amount. Self-funded plans can set primary coverage limits lower than what the law requires to opt out of PIP. Health insurance will also not cover lost wages or modification to houses or cars if you become disabled, so even if you have a QHC you don't have 1:1 coverage replacement.
The bigger potential savings is next year when the medical fee schedule comes out. I am personally sticking with unlimited this year.
According to AAA the Governor took away student/grades discount completely. My insurance went up by 400 dollars more
Literally just got off the phone with Phil Klein Insurance (thanks for the ads on mgoblog). We are going to keep the unlimited coverage and increase our bodily injury liability up to $500k. Haven't gotten the quote yet, so we'll see what the change in price is.
My wife works in the neuro-rehab world, specifically with brain and spinal injuries from auto accidents. $250k or $500k will last you a month or two if you are seriously injured. I would not expect primary medical to pay for an auto related injury, especially not the long term care required. At that point, you are looking at being covered by medicaid which will definitely get you a different level of care than what you would have had under the old unlimited auto coverage. The chances of having a debilitating injury in a car accident are very low, but they aren't zero. Everyone will have to assess their tolerance for that risk.
BIL will be an important consideration, and also the mini-tort liability went up to $3k. Insuring for mini tort costs single digits, so that might also be something to look at.
Lawsuit frequency is nearly certain to increase. As such, we strongly recommend reviewing your liability coverage.
Thanks for the shout out Kilgore. This is Owen from PKIG | Phil Klein Insurance and I strongly endorse the options you chose.
Your overall take is on the money.
Beyond that, I would recommend calling an insurance professional for advice on your specific situation. Of course we'd be ecstatic if you called us at PKIG but just make sure you are properly advised.
Thanks for the shout out Kilgore. This is Owen from PKIG | Phil Klein Insurance and I strongly endorse the options you chose.
Your overall take is on the money.
Beyond that, I would recommend calling an insurance professional for advice on your specific situation. Of course we'd be ecstatic if you called us at PKIG but just make sure you are properly advised.
I will say about 90% of my clients who have contacted me have kept unlimited medical. As of today I have only had one opt out completely and it is because she can no longer legally operate a vehicle but has decided to keep her vehicle.
Almost everyone will see some sort of reduction in the premium because of the mandatory rate reductions in the PIP and the reduction in the MCCA fee. In general most clients don't want to be the one to test out the new system. Also, be very careful assuming your medical coverage covers auto accidents. I have seen several that don't. In order to opt out you will need a letter from your health insurance carrier stating they cover auto accidents and that seems to be like pulling teeth.
A new fee schedule goes into effect next year which should make the $500,000 limit stretch farther if you choose that option.
I have decided to keep unlimited on my own personal policy going forward for the foreseeable future.
13 months ago, I was a pedestrian and was run over by a car (while I was walking back to my car through the parking lot after a Michigan baseball game). Broke my leg (tib/fib fracture) and ankle.
I will tell everybody and anybody who listens: get full PIP on your auto insurance. It was the greatest thing in the world--everything auto insurance did was equal or superior to what I would have received from my health insurance. A couple of nurses at U of M hospital even told me how lucky I was that it was an auto accident and I could use my PIP as my primary insurance rather than having to use my health insurance.
Everything--surgery, meds, nearly unlimited rehab, etc.--was covered by my PIP, no questions asked and no fighting through red tape. I had a friendly agent assigned to the case who I could call with questions. I think I ended up paying about $100 out of pocket total for the entire process, from ambulance ride through my last visit to rehab.
You won't get that kind of coverage from your health insurance, no matter what your plan is.
My understanding is that the order of priority on who pays for accidents has changed a bit with the new law in certain situations, but that pedestrians and cyclists are still covered by their own insurance first. Probably something to discuss with an agent if that matters.
Jeezus, you got hot int he Ray Fisher lot? Who was the maniac driving?
Indiana fan, believe it or not.
He was looking at a car coming from the left, and he turned right over me before I could dodge. I was assuming he was yielding to the other car, but instead the Hoosier stepped on the gas to try to beat the other guy to the intersection.
It wasn't the most enjoyable summer of my life, but I won't complain--it would have been even worse if I hadn't been paying some attention.
My brother in law the insurance agent says to elect to keep your unlimited coverage. That is all I got.
Well, this plan was bipartisan so you can be sure everyone will be fucked over equally.
Blatantly untrue.
The lawyers always win.
*Insurance companies!
As someone you used to audit insurance and now works in finance at a healthcare company, the big loser is healthcare because they don't get to charge auto ins 3x what they charge normal health ins. Insurance Co.'s in Michigan aren't really more profitable than anywhere else.
As someone who also works in accounting and reimbursement in hospitals, let me clarify. We charge everyone the same, that's the law. Most insurance companies have negotiated rates that pay less than what hospitals charge. Auto insurance companies rarely have negotiated rates, although I don't work in any state with unlimited coverage like Michigan, perhaps those who operate there do.
Most states Auto just pays the first 5-10k then the regular insurance picks up their portion and we write off the rest. I know nothing about the new law, but assuming it works the same way as other states I wouldn't take the unlimited.
The end amount paid is what matters and that is certainly NOT the same. After rebates and discounts there is a huge difference. Think about it this way. an auto insurer is going to cover trauma exclusively so you can't really choose to have an out of network health provider. Without any leverage how can they negotiate a discount? That is why the fee schedule (like workers comp already does) is so important.
Also Michigan PIP replaces wages for multiple years, and will pay for modifications to your car or house if you become disabled. Health ins won't and because of no fault you can't just sue for what you might need beyond mini tort ($3k). Assuming the MI law works the same as other states would be a huge mistake.
In fact I'm pretty sure you will be able to sue going forward for uncovered medical and work loss expenses. That is why liability premiums will be going up as PIP premiums drop.
The end amount paid is never the same, of course! That's why insurance carriers negotiate. Auto insurance companies only pay a pittance, so they don't bother to negotiate. Again, I don't work with a state like Michigan, where they cover 100%.
I would hope State Farm in Michigan would call the CFO at the hospital or LTC facility and offer pennies on the dollar like all other out of contract payors do, but I don't know for sure. I've negotiated hundreds of these, and am generally just happy someone is willing to pay. Most people have no idea how frequently insurance companies fail to pay hospitals.
I have Short Term (Sick Leave) and LTD through my employer, why would I pay twice for the same coverage? If you don't, then by all means, carry the coverage. If you don't have insurance, as I did not when I was young, carry the coverage. But if you have pretty much Average Joe insurance and Average Joe benefits I wouldn't carry it.
I'm keeping unlimited. No chance I'm going to put my family at risk of massive medical bills due to health insurance companies fighting with car insurance companies trying to figure out who should be paying for a potential hospital stay, or worse.
Rates are going down this year anyway. I'll revisit once the system is a little more mature.
I used to handle MI PIP claims for a well known insurance company before my claims office closed. I have since switched to handling Auto claims for a slightly smaller company, but I’ll tell you this: keeping the outstanding PIP coverage is similar to having an umbrella policy if you make a decent living or your spouse does. Your cheapskate neighbor will tell you that you’ll never need it. Odds are (and hopefully) you never will. But ask your neighbor this: God forbid your 16 year old is in a persistent vegetative state, who’s going to remodel your home to accommodate her situation AND pay all the medical bills? If the headrest on your car breaks when you are rear ended and your neck snaps but you don’t die, who’s going to take care of you?
Sadly, I had to personally handle those situations and others that made my stomach churn. Choose wisely.
Your not going to save much at all. My insurance carrier told me MI drivers saving little with this law. I had about a $200 savings after reducing from unlimited to $250k.
Your insurance carrier told you that so you wouldn't shop around. There's supposed to be a minimum amount of savings built into the law as a requirement. 35% is the number for choosing $250K. That's probably some kind of average, but still.
There is also the fact that ins co's can't give discounts based on zip codes or credit scores. If the poster lived in a rural area and had a great credit score, the number they quoted is totally realistic.
The cost savings in 2020 aren't huge $$. Banning hospitals from charging auto 3x what they charge health ins is where the real savings are, but that doesn't become law until 2021 and will take a minute for the market to readjust and price insurance lower.
Nope. I work through an Independent Agent. You will not see 35% savings. If you find it let me know. But I know many people who have contacted their carriers and nobody is seeing 35%.
The mandatory rate reductions apply only to the PIP premiums. You will not see a 35% savings on the whole premium, but it is supposed to apply to the PIP premiums.
Correct. Which is why the savings is so little. On top of it, I heard the Insurance carriers ‘snuck in’ some 11th provision to offset these areas. Not sure how true this is but time will tell.
My understanding is, your insurance company is supposed to send out a mailing telling you your new options. I haven't seen one. So I'm not entirely sure what I'm gonna do yet, except call my insurance company and ask for quotes. I'm leaning toward the $250K.
Talk to your insurance agent about your liability coverage vs the assets you have. In Michigan you can be sued if someone in your household injures a person but you are the one with the assets. Most people in Michigan don't have enough liability insurance (from what I've been told).
If you have a paid off house or significant retirement savings, etc these are at risk.
I moved mine up to 500k for all vehicles (didn't add that much to the policy) and 1M umbrella which was around $140 I think (combined auto/home which yielded a total pkg discount).
Are you sure your house is at risk? I thought there was an exemption/shield from liability judgments for your primary residence. I do recommend that anyone with any sort of significant personal assets get an umbrella which comes in over on top of both your auto liability coverage and your personal liability coverage (homeowners or renter's policy).
Those on medicare will see significant immediate premium savings when the law takes effect by eliminating auto PIP coverage because because plans that include medicare part A and part B coverage count as qualified health care plans. This is a big change. In the past Mich required Auto PIP coverage to be primary over Medicare unlike almost every other state. Now Medicare can be primary in Michigan.
I have insurance with Progressive and I am eliminating the optional coverage. Progressive has said I must call them July 1 to make the change and that will be the first thing I do that morning.
The lobbyists strike again… At least until now.
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