NGIC Michigan Auto Insurance Coverage PDF

Bodily Injury Michigan (MI) law requires us to offer clients 250/500 Bodily Injury Liability limits for our first offering. Clients wanting lower limits will need to return a signed form confirming their selection within 14 days. If the insured does not return the signed form within the 14-day...

Bodily Injury Michigan (MI) law requires us to offer clients 250/500 Bodily Injury Liability limits for our first offering. Clients wanting lower limits will need to return a signed form confirming their selection within 14 days. If the insured does not return the signed form within the 14-day timeframe, the policy will be issued with 250/500 for Bodily Injury. Commented [KM1]: Must read b4 coverages If you read the following statement verbatim to the client before preparing the quote, you can offer and quote the policy limits the client requests. There is no need to present the rate for the 250/500 bodily injury option. As a licensed agent, it is important to follow state laws to not face penalties. “The state of Michigan (MI) requires auto insurance policies to provide bodily injury liability insurance coverage with a minimum limit of $250,000 per person and up to $500,000 per accident; however, you may elect higher or lower limits depending on the amount of protection needed.” Commented [KM2]: What limits do you have or did you have before. Michigan (MI) Collision Options Michigan (MI) residents have three different collision options. You must explain all three collision options on EVERY Michigan (MI) call. Commented [KM3]: MUST Broad Collision Broad Collision is physical damage protection for the insured’s vehicle when damage results from impact with another object or upset, regardless of fault. The collision deductible only applies if the insured is at fault. This is the best collision option to recommend to your clients. Standard Collision  Standard Collision is physical damage protection for the insured’s vehicle when damage results from impact with another vehicle or object, regardless of fault. The collision deductible must always be paid before this coverage can be used. Limited Collision Limited Collision is physical damage protection for the insured’s vehicle when damage results from impact with another object or upset, depending on fault. This coverage only pays out if the insured is not at fault. No deductible applies. This is the last collision option you should recommend for your clients. NOTE: You cannot sell limited collision on a financed vehicle. Michigan (MI) Specific Coverages Property Damage Liability Buyback (PDLB) Michigan (MI) 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 for the insured’s vehicle. Under 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. NOTE: Property Damage Liability Buyback is recommended on all vehicles in Michigan (MI). Property Protection Insurance Property Protection Insurance (PPI) provides coverage up to $1,000,000 for damage the insured may cause to fixed objects during an accident Michigan (MI) Catastrophic Claims Assessment (MCCA) The Michigan (MI) Catastrophic Claims Assessment helps to pay for injuries in excess of $580,000 sustained by Michigan (MI) residents (depending on the policy inception date). MCCA is an extension of the underlying Michigan (MI) auto coverages and goes into a general pool used by the state. The assessment is applied to the Unlimited Personal Injury Protection Allowable Expenses. MCCA is handled as coverage rather than a tax. This is a state-mandated coverage and cannot be removed. Michigan (MI) Catastrophic Claims Assessment Deficiency (MCCAD) Michigan (MI) Catastrophic Claims Assessment Deficiency is an extension of the underlying Michigan (MI) auto coverages and goes into a general pool used by the state. This assessment is applied to PIP Allowable Expense limits of $50,000, $250,000, $500,000, and $250,000 with Exclusion PIP options. This fee is equal to the assessment amount set by the MCCA. This is a state-mandated coverage and cannot be removed. Michigan (MI) Personal Injury Protection (PIP) Michigan (MI) Personal Injury Protection is different than that of which we offer in other states. In some aspects, it is the most unique and most comprehensive. Keep the following items in mind: 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. 1. PIP Allowable Expenses (Medical) includes medical, attendant care, and funeral benefits. 2. PIP Other includes replacement services, survivor’s benefits, and wage loss. Personal Injury Protection – Medical Options Michigan (MI) clients have flexibility in their coverage level for Personal Injury Protection for medical protection and can choose the best option that meets their needs and budget; However, different coverage levels may have eligibility requirements. Below are the six PIP medical coverage levels available to Michigan (MI) drivers: 1. Unlimited No health insurance requirement 2. $500,000 limit No health insurance requirement 3. $250,000 limit No health insurance requirement 4. $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. 5. $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. 6. 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 to be eligible to opt-out of PIP AE medical coverage. NOTE: If clients do not make the mandatory selection of a PIP coverage limit by signing and providing NGIC with a PIP coverage selection form by the to-do date (system supported), by law coverage will default to ‘Unlimited’ and the client will be charged the applicable premium. Medicare and Medicaid Medicare and Medicaid are 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 Qualified Health Coverage is other health or accident coverage that does not exclude or limit coverage for injuries related to motor vehicle accidents and has an annual deductible that is $6,579 or less per individual. Some examples of Qualified Health Coverage include but are not limited to: Employer Provided Coverage if it covers auto accident injuries, and the annual deductible is $6,579 or less per individual. Federal Medicare is for individual(s) that have both Parts A and B TRICARE is for active-duty military and their dependents. It is 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.  Note: Clients may have other coverage in place, but not all coverages meet state guidelines to be considered Qualifying Health Coverage. Medicaid and health care sharing ministries are examples of coverages that 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. Proof Required for PIP AE Medical Selection 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. Underwriting Questions - Personal Injury Protection 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, we need to get some information from the client. To do so, refer to the Michigan (MI) PIP Flowchart. Coordination of Benefits for Michigan (MI) Personal Injury Protections (PIP) In Michigan (MI), we offer coverage coordination options that can help the client save money on their premium. Personal Injury Protection (PIP) Options Coordination of Medical and Work Loss If an insured already has insurance (which could come in the form of employee benefits), we will let that coverage pay primary. This limits the amount we pay and the amount of premium the client pays. This means that their auto policy will “coordinate” with other insurance the client may have. 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 Coordinated work loss coverage is available when all members of the household, covered under this policy, are employed and covered by a disability plan that pays lost wages if they are unable to work. The auto insurance policy covers secondary, once the primary work loss is exhausted in the event of an auto accident. Coordinating work loss benefits reduces the PIP premium by approximately 15%. This means that that their auto policy will “coordinate” with other insurance they may have which reduces the exposure to NGIC. Coordination of Medical Coordination of medical expenses is available when all members of the household, covered under this 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 in the event of an auto accident. You cannot select “coordination of Medical” if the insured or household members have one of the following: Medicare/Medicaid-These two programs are NEVER PRIMARY!! Military Insurance GM retired plans United Auto Workers  If all household members are covered by a medical insurance plan that would pay primary benefits for injuries sustained in an automobile accident—we 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—we cannot Coordinate and would select Primary Some items to note about coordination options: Coordination may generate a TO DO when binding; client may be requested to send in proof that their health care would pay primary. If the client is not sure about their benefits, always select Primary Medical and Work Loss Self-funded programs do not coordinate. When in 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 that is a result of an auto accident. Income Loss coverage can be excluded in certain conditions. Excluding Work Loss provides a lower rate since lost wages will not be payable in event of accident. This exclusion is available only to: 1. Insureds who are at least age 65 and does not ever expect to work again, or 2. Insureds age 60, retired, and receiving a pension. NOTE: Clients under 60 years old are never eligible to exclude work loss whether they are retired or not. Excess Attendant Care Rider The Excess Attendant Care Rider is a benefit of Personal Injury Protection that ensures after an accident, the client has the nursing assistance needed to recover from their injuries. It pays for a nurse or a family member to help clients with the “activities of daily living” they are too injured to do on their own. This coverage is important because Health Insurance doesn't always cover rehab or attendant care. This is required for PIP AE medical limits of $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 isn't available as an add-on.