The recent No-Fault law change contained several provisions that are already in effect, and change the way certain people are able to claim against auto insurance policies. We wanted to point out some of these and make sure you were aware of what discussions you might need to have with customers.
- Named Insured, secondary named insured, spouse of the named insured (or secondary named insured), resident relatives of the named insured (or secondary named insured) are all considered eligible for PIP.
These would be listed and rated on the policy, or in some cases like young children, just included in the household member count. In the event of an accident involving a motor vehicle, these people could make a claim for PIP benefits the auto insurance policy.
- Listed drivers living in the household that are not related to the named insured and not designated as a secondary named insured cannot make a claim for PIP benefits under the auto insurance policy. In an accident, these individuals would make a claim for PIP benefits through the Michigan Assigned Claims Plan, limited to $250,000. The only way for two unrelated, unmarried adults living in the same household to both be eligible for PIP benefits from the same policy is if the second person is designated as a secondary named insured.
- Drivers that don’t live in the household generally cannot make a claim for PIP benefits under an auto insurance policy. In most cases, these drivers would need to be the named insured on their own policy to make a claim for PIP benefits under an auto insurance policy. The most notable exception to this is a college student away at school, those students can remain on their parent’s policy until they move out.
Please consider discussing coverage with any insured’s that intend to cover a person on their policy that is not a resident relative, and remember that in these cases, designating that person as a secondary named insured is the only way to ensure they are eligible to make a claim for PIP benefits under the auto polic
Michigan no-fault auto insurance update
Fri, May 31, 2019
On May 30, Governor Whitmer signed Senate Bill 1, which included significant changes to Michigan’s no-fault auto insurance system.
Most of these legislative changes will go into effect beginning in July of 2020, but we’re already working to understand and communicate to you how these changes will affect our Personal Lines, Recreational Lines, and Commercial Lines products.