Short answer: Michigan drivers choose how much personal injury protection (PIP) medical coverage to buy: unlimited, $500,000, $250,000, $250,000 with exclusions, $50,000 if you're on Medicaid, or no PIP medical if you have qualifying Medicare. If you don't make a choice, your policy defaults to unlimited PIP. Lower levels cost less but shift more risk to you.
Why Michigan is different
Michigan has long had one of the most generous no-fault systems in the country. Before reforms took effect in July 2020, every policy included unlimited lifetime medical benefits for auto injuries. Now drivers can choose. The state's official auto insurance site, michigan.gov/autoinsurance, run with the Department of Insurance and Financial Services (DIFS), explains the options.
The six PIP medical options
| Option | Who can choose it |
|---|---|
| Unlimited | Anyone |
| $500,000 per person per accident | Anyone |
| $250,000 per person per accident | Anyone |
| $250,000 with exclusions | Named insured with qualified health coverage; household members can be excluded if they have qualified health coverage or other PIP |
| $50,000 | Named insured enrolled in Medicaid; spouse and resident relatives must have qualified coverage, Medicaid or other PIP |
| Opt out of PIP medical | Named insured with Medicare Parts A and B; spouse and resident relatives must have qualified coverage or other PIP |
You select your level on a state-prescribed form. If you don't return it, the insurer issues unlimited coverage.
What PIP pays
PIP medical pays allowable expenses for care, recovery and rehabilitation after an auto accident, regardless of fault. Michigan PIP also includes other benefits, such as wage loss and replacement services, that aren't controlled by the PIP medical choice. The reforms also introduced a medical fee schedule that limits what providers can charge.
How to choose
Ask yourself:
- What does my health insurance cover for auto injuries? Some health plans exclude or limit auto-accident injuries. "Qualified health coverage" has a specific meaning under Michigan law, so confirm that your plan qualifies.
- What would long-term care cost? Catastrophic injuries can require decades of care. Lower PIP limits can run out.
- Who's in my household? Everyone in the household is affected by the choice.
- How much is the savings? Compare the premium difference between levels.
Liability limits also changed
The reforms also raised default bodily injury liability limits. Unless you choose lower limits in writing, Michigan policies default to $250,000 per person and $500,000 per accident. You can choose a lower amount, but not below $50,000/$100,000. If you choose PIP below unlimited, your exposure to lawsuits for medical costs above your PIP limit also matters, so higher liability limits remain important.
Michigan's other unique coverages
- Property protection insurance (PPI): pays up to $1 million for damage your car does to other people's property in Michigan, such as buildings and properly parked cars.
- Limited property damage liability (mini-tort): helps pay the other driver's out-of-pocket vehicle damage if you're at fault. See Michigan mini-tort explained.
Common scenarios
You're on Medicare Parts A and B, and your spouse has qualifying employer coverage. You may be able to opt out of PIP medical. Confirm details with your insurer first.
You chose $250,000, and a serious crash leads to $400,000 in medical bills. Your health insurance may cover some of the remainder, and you may be able to claim excess medical costs against an at-fault driver.
You forgot to return the selection form. You have unlimited PIP by default.
Key terms
- PIP medical: no-fault medical benefits after an auto accident.
- Qualified health coverage: health insurance that meets Michigan's standard for covering auto injuries.
- PPI: property protection insurance for damage to property in Michigan.
- Fee schedule: limits on what providers can charge auto insurers.
Questions to ask your broker
- Does my health plan count as qualified health coverage?
- What's the premium difference between each PIP level?
- Are my liability limits still at least 250/500?
- How does my choice affect each household member?
Bottom line
Michigan's PIP choice can save money, but it moves risk from your insurer to you and your health plan. Choose deliberately, confirm your health coverage qualifies, and keep strong liability limits.
Contact Alishahi Insurance or call (877) 711-4545. See insurance in Michigan and auto insurance.
Frequently asked questions
What are the Michigan PIP options?
Unlimited, $500,000, $250,000, $250,000 with exclusions, $50,000 for Medicaid enrollees, or opting out with qualifying Medicare.
What happens if I don't choose a PIP level in Michigan?
Your policy defaults to unlimited PIP medical coverage.
Who can opt out of PIP in Michigan?
A named insured with Medicare Parts A and B, if household members have qualified coverage or other PIP.
What are Michigan's default liability limits?
$250,000 per person and $500,000 per accident, unless you choose lower limits in writing, down to $50,000/$100,000.
What is PPI in Michigan?
Property protection insurance that pays up to $1 million for damage your car does to others' property in Michigan.
Alishahi Insurance · 439 N Canon Dr, Penthouse, Beverly Hills, CA 90210 · (877) 711-4545 · CA License #4348151. General information only. This isn't legal, tax or financial advice or a coverage determination. Coverage depends on policy language and underwriting, and rules vary by state.