Michigan Reaches Agreement on PIP Coverage for Uninsured Vehicle Claimants

August 18, 2021

Michigan insurance regulators and the state’s personal injury protection (PIP) medical coverage program have reached an agreement regarding unlimited coverage for persons injured in an automobile accident prior to the July 2, 2020, implementation of the state’s new auto insurance law.

The Michigan Department of Insurance and Financial Services (DIFS) said the agreement ensures unlimited PIP medical coverage for uninsured vehicle occupants and pedestrians who were injured in auto accidents prior the effective date of the new law.

Previously, uninsured non-drivers, such as passengers and pedestrians, were entitled to receive unlimited PIP medical coverage through the Michigan Assigned Claims Plan (MACP), which is administered by the Michigan Automobile Insurance Placement Facility (MAIPF).

Under Michigan’s new auto insurance law, this coverage was capped at $250,000 for claims incurred beginning July 2, 2020.

However, uninsured non-drivers injured between June 11, 2019, when the new auto insurance law was enacted, and the law’s July 2, 2020, effective date faced uncertainty about their coverage limits due to differing interpretations of the new statute.

To address this issue, a DIFS order issued in September 2019, attempted to clarify that the MACP was required to provide unlimited PIP medical coverage to those uninsured non-drivers who were injured prior to July 2, 2020.

The MAIPF then filed a lawsuit in the Michigan Court of Claims, seeking to overturn the DIFS order and to allow this coverage to be capped at $250,000 as of June 11, 2019.

The Michigan Court of Claims upheld the DIFS order, ensuring that eligible uninsured non-drivers had access to unlimited PIP medical coverage when they were injured in an automobile accident. MAIPF had filed an appeal to the Court of Claims decision but, under the terms of the settlement, it has been dropped.

“We are happy that this matter has been successfully resolved. As a consumer protection agency, DIFS is always focused on the best interest of Michigan consumers,” DIFS Director Anita Fox said in a media release. “The premature imposition of a $250,000 cap could have severely impacted the lives of Michigan drivers and uninsured passengers, pedestrians, and bicyclists.”

Source: Michigan Department of Insurance and Financial Services

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