Hello! I’m Dan Lyles with Lyles insurance. In this video, were going to go over the new law changes made in Michigan regarding auto insurance.
This new law was actually passed about this time last year. But the changes don’t go into effect until this July 2, 2020. And were going to go over the basics of what you need to know about these law changes.
Why are changes being made? Well basically, the unlimited lifetime medical benefits part of an auto insurance policy made the entire policy far too expensive for many drivers. In fact, Michigan ranked one of the highest states in the country as far as highest auto insurance rate. And also, the city of Detroit ranks number one nationwide. And also, because people couldn’t afford the auto insurance premiums, Michigan also ranks very high as far as the percentage of drivers on the road who are uninsured. So these changes had to be made and were long overdue!
So what’s changing? Well, starting in July, you will no longer be required to pay for unlimited lifetime medical coverage on your auto insurance. You will now have options of choosing lower levels of coverage if you want it. And there’s some other changes that are going to be made that I’ll get into later.
So now you will be given five coverage options. Option one is to keep everything like it is and still have unlimited lifetime medical benefits coverage. Just because you’re no longer required to keep it doesn’t mean you have to get rid of it. If you are happy with what coverage you have, you can stay with it. Option two is 500,000 and 1 million dollars in medical benefits coverage. What that means is, $500,000 would be the most that it would pay any one person for their injuries. But if you have passengers in your vehicle, the number on the right, the 1 million, would be the most in total it would pay for everybody. And then if you look, option three is half that amount, 250,000 and 500,000. Option four is quite a bit lower: $50,000 and $100, 000. Option five is to do away with medical benefits coverage altogether. So, for options one, two and three, they’re available to anybody. Options four and five depend on what health insurance coverage you have or don’t have. And we’re going to get into that on the next screen.
So for those of you who do have health insurance, whether it’s an individual plan or it’s a health insurance plan sponsored by your employer, as long as it does cover you for injuries in an auto accident and your deductible is not higher than $6000, then you’re good to go with any of those five options. If you have health insurance coverage with Medicare, you’re also available to choose from any of the five options. If you have health insurance coverage with Medicaid, you can choose options one through four, but you can’t choose option five where you opt out of medical coverage altogether. And for those of you who have health insurance that don’t qualify, or if you don’t have health insurance coverage at all, you can choose between options one through three, but not options four and five.
So to simplify the last two screens I showed you, here’s a quick little reference chart. Makes it easy for you to see where you stand with which options you can choose.
Here are some other significant changes to the new law. The good news is the MCCA fee is going to go down from $220 to $100 for anybody who chooses option one, and go away completely for any other option you choose. That’s going to save a lot of money, especially those of you who have multiple vehicles on your policy. Number two, the bodily injury liability part of your coverage is going to increase. It’s going to go from $20,000/$40,000 up to $50,000/$100,000. That will make a minimal impact on your rate, but it won’t hurt you as bad as you might think. And one thing to keep in mind, the default rate is set at $250,000/$500,000 for this, but you can choose lower levels as long as you sign a waiver. And finally, there are major changes in how auto insurance companies will be allowed to use certain rating factors in calculating your auto insurance premium. Many common rating factors will no longer allowed to be used. This includes gender, marital status, credit score, residential status, zip code, etc.. For many of you, this may cause your auto insurance premium to change drastically. Some drivers rates will go up and others will go down. So when you reach the expiration date on your policy, it would be a great time for you to check rates with other companies before you renew your policy.
If you would like for me to personally run you an auto insurance quote, I will be very happy to do so. I’ve posted a link from my website where you can get a quote online. I will also post this link below the video to make it easy for you to click on. Or if you’d rather just get a quote by phone, I’ve also posted my phone number. Thank you for watching and have a great day!
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Dan Lyles is an Independent Insurance Agent serving Ohio, Indiana, Michigan, Pennsylvania, Virginia and West Virginia..