Michigan’s New Auto Insurance Law Explained

Last year, Gov. Whitmer signed new legislation to create a better no-fault system for Michigan drivers. This new auto no-fault law will lower costs for Michigan drivers, maintain the highest coverage options in the country, and strengthen consumer protections, according to the Michigan Department of Insurance and Financial Services.

What does the new law change?


Personal Injury Protection (PIP) Choice: For the first time, drivers are able to choose a coverage level that meets their needs and budget. Under certain circumstances, drivers may choose to opt out of PIP medical entirely or exclude specific household members. Coverage as follows:

    • Opt out ($0)
    • $50,000
    • $250,000
    • $500,000
    • Unlimited

If an individual has Medicare Part A and B or has qualified health coverage, they are eligible to opt-out of PIP coverage. If an individual is enrolled in Medicaid and if the person’s spouse and any resident relative has qualified health coverage, Medicaid, or PIP benefits, individuals can select the $50,000 PIP coverage level. Qualified health coverage means another accident or health insurance that does not exclude or limit coverage for injuries related to motor vehicle accident, and has an annual deductible of $6,000 or less per individual or is Medicare Parts A and B.

Premium Reduction: This new law requires all insurance companies to reduce statewide average PIP medical premiums for eight years.

Fee Schedule: A new fee schedule between auto insurers and medical providers has been designed to control the costs that medical providers may charge auto insurers. This new cost control provision will operate similarly to health insurance.

Michigan Catastrophic Claims Association (MCCA) Assessment: An association of auto insurers, the MCCA has announced it is lowering its per-vehicle assessment, which will save Michigan drivers at least $120 per car.

To see if you are eligible for cost reductions, contact your health insurance provider. If you qualify, request proper documentation to share with your auto insurance provider to discuss options.

Increases Consumer Protections

Elimination of Certain Non-Driving Factors: Auto insurance companies are now prohibited from using sex, marital status, homeownership, credit score, educational level, occupation, and zip codes in setting a driver’s auto insurance rates under this new law.

Fraud Investigation Unit: Auto insurance fraud increases premiums for all Michigan drivers. A new unit has been established to investigate criminal and fraudulent activity related to the insurance and financial markets. This unit will work with the Attorney General and law enforcement to prosecute these crimes.

Prior Approval: Before being offered to consumers, auto insurance rates and policies are now required to be filed with, and approved by, the Department of Insurance and Financial Services.

Fines and Penalties: Insurance companies, agencies, and licensed agents who violate the law will experience increased fines under this new law.

Additional Changes

Residual Bodily Injury (BI) Coverage: This new law increases the minimum BI coverage limit an insurance company is required to offer to protect Michigan drivers from claims by other injured persons.

Mini-Tort: For uninsured damages, this new law increases the amount of money that can be recovered in small claims court.

Who Is Eligible?

Michigan drivers with insurance policies issued or renewed after July 1, 2020, are eligible to take advantage of the new auto no-fault insurance law.

Note, if you are already receiving payments from your auto insurance policy due to injuries from an auto accident, you will continue to receive the current unlimited benefit regardless of the choice you make for the future, according to the Department of Insurance and Financial Services.

You are encouraged to contact your health insurance provider to see if you qualify. For more information, please visit https://www.michigan.gov/autoinsurance/.

DIFS dedicated hotline 833-ASK-DIFS (275-3437)
DIFS dedicated email address autoinsurance@michigan.gov