Untitled

• Michigan law states that clients must be offered 250/500 Bodily Injury Liability limits as the first option.
• Clients wanting lower limits must sign a form confirming this within 14 days.
• If the signed form is not returned in time, the policy defaults to 250/500 for Bodily Injury.
• Agents must read a provided statement verbatim to clients before preparing a quote in order to offer policy limits requested.
• Following state laws is important to avoid penalties as a licensed agent.
• Michigan auto insurance policies must provide bodily injury liability insurance coverage with a minimum limit of $250,000 per person and up to $500,000 per accident.
• Clients may elect higher or lower limits depending on the amount of protection needed.

Michigan (MI) Collision Options

• Michigan residents have three different collision options that must be explained on every call.

• Broad Collision:

  • Physical damage protection for the insured's vehicle.
  • Covers damage from impact with another object or upset, regardless of fault.
  • The collision deductible applies only if the insured is at fault.
  • It is the best collision option to recommend to clients.

• Standard Collision:

  • Physical damage protection for the insured's vehicle.
  • Covers damage from impact with another vehicle or object, regardless of fault.
  • Always pay the collision deductible before coverage is used.

• Limited Collision:

  • Physical damage protection for the insured's vehicle.
  • Covers damage from impact with another object or upset, depending on fault.
  • Coverage pays out only if the insured is not at fault.
  • No deductible applies.
  • It is the last collision option to recommend to clients.
  • Limited collision cannot be sold on a financed vehicle.

• At Fault:

  • Broad Collision: Pay deductible
  • Standard Collision: Always pay deductible
  • Limited Collision: No coverage

• Not at Fault:

  • Broad Collision: No deductible
  • Standard Collision: Always pay deductible
  • Limited Collision: No deductible, but are still covered

Michigan (MI) Specific Coverages

• Michigan property damage claims are handled differently than other states.

• Property damage to a vehicle is paid under the insured's own Collision coverage.

• If the insured elects not to carry Collision coverage, the insurance company will not pay collision damages.

• Property Damage Liability Buyback (PDLB):

  • If the insured's vehicle is damaged in an auto accident, they can sue up to $3,000 from the at-fault driver.
  • It is recommended on all vehicles in Michigan.

• Property Protection Insurance (PPI):

  • Provides coverage up to $1,000,000 for damage caused to fixed objects during an accident.

• Michigan (MI) Catastrophic Claims Assessment (MCCA):

  • Helps pay for injuries exceeding $580,000 sustained by Michigan residents, depending on the policy inception date.
  • MCCA is an extension of underlying Michigan auto coverages and goes into a general pool used by the state.
  • The assessment applies to Unlimited Personal Injury Protection Allowable Expenses.
  • MCCA is handled as coverage rather than a tax.
  • The coverage is state-mandated and cannot be removed.

• Michigan (MI) Catastrophic Claims Assessment Deficiency (MCCAD):

  • An extension of underlying Michigan auto coverages.
  • Goes into a general pool used by the state.
  • The assessment is applied to PIP Allowable Expense limits of $50,000, $250,000, $500,000, and $250,000 with Exclusion PIP options.
  • The fee is equal to the assessment amount set by the MCCA.
  • The coverage is state-mandated and cannot be removed.

Michigan (MI) Personal Injury Protection (PIP)

• Different than that of which we offer in other states in some aspects.
• The most unique and comprehensive.
• Personal Injury Protection is mandatory on all policies, excluding Named Non-Owner policies and vehicles in storage.
• Personal Injury Protection pays benefits for bodily injury to the named insured, spouse, or any other family member who lives with the named insured.
• There are two PIP selections in NPS both are part of the Personal Injury Protection coverages:
  • PIP Allowable Expenses (Medical) includes medical, attendant care, and funeral benefits.
  • PIP Other includes replacement services, survivor's benefits, and wage loss.

Personal Injury Protection – Medical Options

• Clients have flexibility in their coverage level for Personal Injury Protection for medical protection.
• There are six PIP medical coverage levels available to Michigan drivers:
• Unlimited: No health insurance requirement
• $500,000 limit: No health insurance requirement
• $250,000 limit: No health insurance requirement
• $250,000 limit with PIP medical exclusion(s):
  • This option is for drivers who have Qualified Health Coverage (non-Medicare) that covers auto accident injuries.
  • The insured's spouse and other relatives who live with them must also have qualified health coverage that will cover auto accident injuries or Medicare parts A and B.
• $50,000 limit:
  • This option is only for drivers who are enrolled in Medicaid.
  • The insured's spouse and other relatives who live with them must also have Medicaid or Qualified Health Coverage that will cover auto accident injuries.
• Opt-out of PIP AE coverage entirely:
  • One named insured must be at least 65 years old and enrolled in Medicare (Parts A and B).
  • The insured's spouse and all relatives who live with them must also have Medicare (Parts A and B) or Qualified Health Coverage.
  • If clients do not make the mandatory selection of a PIP coverage limit by signing and providing a specific form by the to-do date (system supported), coverage will default to 'Unlimited' and the client will be charged the applicable premium.

Medicare and Medicaid

• Two separate, government-run programs.
• They are operated and funded by different parts of the government and primarily serve different groups.
• Medicare is a federal program that provides health coverage for those who are ages 65+; or under 65 and have a disability, no matter their income.
• Medicaid is a state and federal program that provides health coverage for individuals with a lower income.

Qualified Health Coverage

• Other health or accident coverage that does not exclude or limit coverage for injuries related to motor vehicle accidents.
• Has an annual deductible that is ≤ $6,579 per individual.
• Examples include:
• Employer Provided Coverage if it covers auto accident injuries, and the annual deductible is ≤ $6,579 per individual.
• Federal Medicare is for individual(s) that have both Parts A and B
• TRICARE is for active-duty military and their dependents (a Department of Defense (DOD) benefit).
• CHAMPVA is a VA benefit for dependents of living veterans rated 100%, for dependents of veterans who died service connected, and for dependents of veterans who were 100% rated when they died.
• TRICARE and CHAMPVA qualify as QHC because neither of them exclude coverage for motor vehicle accidents and all policies have a deductible of less than $6,579 per individual.
• Medicaid and health care sharing ministries are not considered Qualified Health Coverage (QHC).
• Veterans and their dependents who are enrolled in VA benefits through the United States of Veterans Affairs (VA) would not qualify as having QHC because it excludes or limits coverage for injuries related to motor vehicle accidents.
• If PIP Allowable Expenses (Medical) limits of $250,000 with exclusions, $50,000, or Opt Out are selected, then a letter will be required each term from the healthcare provider stating the names of all persons covered under Medicare, Medicaid, or Qualified Health Coverage.
• As licensed agents it is important to understand these regulations and properly advise clients of their options. In order to determine the appropriate Personal Injury Protection Medical selection for the client, agents need to get some information from the client. Refer to the provided Michigan PIP Flowchart.

Coordination of Benefits for Michigan (MI) Personal Injury Protections (PIP)

• In Michigan, coverage coordination options can help clients save money on their premium.

• Coordination of Medical and Work Loss:

  • If an insured already has insurance (e.g., employee benefits), that coverage will pay primary.
  • This will limits what the auto policy pays/the amount of premium the client pays.
  • The auto policy will "coordinate" with other insurance.

• Primary Medical and Work Loss:

  • If an insured does not have work loss insurance/benefits or medical insurance/benefits, the auto policy will be primary for both.

• Coordination Work Loss:

  • Available when all household members covered under the policy are employed.
  • They must be covered by a disability plan that pays lost wages if unable to work.
  • The auto insurance policy covers secondary (once the primary work loss benefits are exhausted due to an auto accident).
  • Coordinating work loss benefits reduces the PIP premium by about 15%.
  • The auto policy will "coordinate" with other insurance.

• Coordination of Medical:

  • Available when all members of the household, covered under the policy, have healthcare coverage that would pay for injuries in the event of an auto accident.
  • The auto insurance policy is secondary (once the primary health insurance is exhausted due to an auto accident).
  • You cannot select "coordination of Medical" if the insured or household members have Medicare/Medicaid, military insurance, GM retired plans, or United Auto Workers. These programs are never primary.
  • If all household members are covered by a medical insurance plan that would pay primary benefits for injuries sustained in an automobile accident, you can select Coordinate.
  • If all household members are not covered by a medical insurance plan that would pay primary benefits for injuries sustained in an automobile accident, you cannot select Coordinate (select Primary instead).

• Coordination may generate a TO DO when binding; the client may be requested to send in proof that their healthcare would pay primary.

• If the client is unsure about their benefits, always select Primary Medical and Work Loss.

• Self-funded programs do not coordinate.

• In cases of doubt, give the client $250,000 for PIP AE and primary for medical and work loss.

Excluding Work Loss-

• Work Loss pays for the insured's loss of income due to an auto accident.
• Excluding Work Loss is only available to:
  • Insureds who are ≥ age 65 and do not ever expect to work again OR
  • Insureds age 60, retired, and receiving a pension.
• Clients < 60 years old are never eligible to exclude work loss (whether retired or not).

Excess Attendant Care Rider

• A benefit of Personal Injury Protection that ensures the client has the nursing assistance needed to recover from injuries after an accident.
• Pays for a nurse or family member to help clients with "activities of daily living" if they are too injured to do them on their own.
• Necessary because health insurance does not always cover rehab or attendant care.
• Required for specific PIP AE medical limits: $50,000, $250,000, and $500,000.
• If the insured has selected the unlimited option for PIP Allowable Expense Medical, Attendant Care is already included, so the rider is not available.