With Auto Insurance, You Get What You Pay For

Editor,

On May 30, 2019, Gov. Whitmer signed Senate Bill 1 into law which "reformed" Michigan's no-fault insurance system.

By July 1, 2020, most of the scheduled changes were made to the system.

The changes in the law were allegedly driven by public outcry over the high cost of auto insurance in Michigan.

Under the changed law, drivers gained the option to choose various levels of personal injury protection medical coverage, including optional limits.

Proponents of the changes claimed that the reforms aimed to lower auto insurance costs for Michigan drivers while maintaining coverage options and strengthening consumer protections.

I was dead set against these changes.

First, insureds had to give up protections and coverage to lower their premiums. The options were confusing.

Secondly, most of us have seen little rate relief and, in fact, have experienced higher premiums since the changes.

Remember the $400 that you received as a result of the changes? That was a disbursement from a fund that guaranteed financial stability of the prior system. Well, much of that "return to policy holders" has been clawed back because the withdrawals from the fund were not accurately calculated. That claw back is accomplished by adding an obscure code and premium charge to your insurance policy.

I am writing this letter to urge Michigan policyholders to be very careful.

Many people have chosen to reduce coverage and found out, after a serious accident, that they are not adequately covered.

Be careful how you purchase your personal injury protection coverage. Be mindful that limiting your insurance coverage can leave you unable to afford proper medical care, rehabilitation services and attended care.

With Michigan no-fault insurance today you really do get what you pay for. And conversely, you lose what you decide not to pay for. And the loss can be substantial and change your life.

Make sure that if you are insured by Medicare or Medicaid that you understand the limitations of those coverages. Many employers' self-insured health insurance plans cannot be coordinated with personal injury protection.

My advice? Take some time to speak to your insurance agent. Make sure that you understand what your current coverages are. If you have health insurance through your employer make sure you question how that coverage works with no-fault PIP.

More importantly, if you have purchased automobile insurance online, make sure that you are aware of what you have purchased. So many ads on social media claim huge reductions in premiums. It is likely that the lower premiums came with substantial reductions in coverage and protection.

Please do not end up in the hospital, a wheelchair, or a rehab facility, regretting that you did not understand what you were buying.

Ed Meny

St Joseph

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