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Deductibles and Exclusions from Michigan No-Fault Insurance Coverage; Coordinated Benefits

Attorney Commentary on No-Fault Statute: MCL 500.3109a

Deductibles and exclusions relating to other health and accident coverage; coordinating No-Fault benefits with health insurance coverage

Under this statute, Michigan auto insurance companies may offer to drivers the opportunity to select “deductibles and exclusions” on No-Fault benefits coverage that are “reasonably related to other health and accident coverage.” (MCL 500.3109a(1))

This means that drivers would be able to “coordinate” their No-Fault PIP medical benefits coverage with their health insurance in return for “a reduced premium” on their auto insurance.

In the event that a person with “coordinated” No-Fault benefits is injured in a car accident, his or her health insurance plan will be the “primary” payer for the person’s accident-related medical expenses. No-Fault will serve as the “secondary” payer, providing coverage once the health insurance plan’s limits have been reached.

Additionally, under limited circumstances, this statute allows a person to opt-out of No-Fault PIP medical benefits altogether. The requirements for doing so are: (1) The person must have chosen the $250,000 coverage level for No-Fault PIP medical benefits (once the new coverage levels become available in policies issued or renewed after July 1, 2020); and (2) the person, his or her spouse and any relatives who live in the person’s home must have “qualified health coverage . . . that will cover injuries that occur as the result of a motor vehicle accident.” (MCL 500.3109a(2))

The “qualified health coverage” required by the statute consists of “health or accident coverage” that “does not exclude or limit coverage for injuries related to motor vehicle accidents” and that does not have an “annual deductible for the coverage” that exceeds $6,000. (MCL 500.3107d(7)(b)(i))

Importantly, a person who selects the opt-out option in this statute will have his or her auto insurance “premium” for No-Fault PIP medical benefits “reduced by 100%,” but he or she “is not eligible” for No-Fault PIP medical benefits “under the insurance policy” in the event he or she is injured in a car accident. (MCL 500.3109a(2)(a) and (c))

Fraud Exclusions

Significantly, some Michigan No-Fault insurance companies may add additional “exclusions” to an insurance policy that allow them to refuse coverage of No-Fault benefits if it can be shown a person has intentionally lied on an insurance application. This can happen even after a person has suffered serious or catastrophic personal injury following an auto accident.

One can therefore expect that in instances where a person has suffered serious personal injury that will require extensive payment of medical benefits, attendant care, and wage loss, that some insurance companies will now perform investigations to see if they can void an insurance policy or avoid making payment of these otherwise mandatory No-Fault benefits. Instances where an insurance company has found “material misrepresentations” and where the insurer has subsequently voided a No-Fault policy or refused to pay otherwise incurred and proper No-Fault benefits have been upheld by Michigan courts.

No-Fault Attorneys of Michigan Auto Law

The attorneys of Michigan Auto Law have been specializing in auto No-Fault litigation for more than 50 years. If you have been injured in a car, truck or motorcycle accident and want information about your No-Fault rights, please call one of our expert lawyers for a free case evaluation at (800) 777-0028 or fill out our consultation form. There is no fee or obligation.

We are here to help you.