Customers First Insurance Group: practical insurance guidance • format updated August 2026
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Michigan No-Fault Reform: A Driver’s Guide
Michigan no-fault reform changed PIP medical choices, liability limits, and auto insurance decisions.
Six PIP choices
Health coverage matters
Liability limits changed
Review every renewal
The short answer
Review the options and risks for Michigan drivers.
What Did Michigan No-Fault Reform Change?
Governor Gretchen Whitmer signed Public Acts 21 and 22 of 2019 on May 30, 2019. The main consumer changes apply to auto policies issued or renewed after July 1, 2020.
Michigan no-fault reform preserved unlimited PIP medical as an option while creating lower limits and certain exclusion or opt-out choices. It also changed bodily injury liability defaults, created medical fee schedules, strengthened rate review and fraud enforcement, and prohibited the use of certain non-driving rating factors. DIFS updated the fee-schedule adjustment for services from July 2, 2026 through July 1, 2027 in Bulletin 2026-09-INS, issued February 25, 2026.
A December 2, 2025 DIFS report on Michigan auto insurance reform reviews the law’s effect on coverage, costs, and uninsured drivers.
PIP Medical Is Only One Part of PIP
PIP medical pays allowable expenses for medical care, recovery, and rehabilitation after an auto accident, up to the chosen limit. Separate PIP benefits—such as eligible wage loss, replacement services, and certain funeral expenses—can remain part of the policy even when someone qualifies to exclude or opt out of PIP medical.
No-Fault Does Not Mean No One Can Be Sued
A driver can still face liability for another person’s serious injury or death, medical expenses above the injured person’s PIP medical limit, certain out-of-state accidents, and other situations allowed by Michigan law. Therefore, PIP and bodily injury liability solve different problems.
Michigan No-Fault Reform PIP Medical Options
The state describes six PIP medical selections. To begin, unlimited, $500,000, and $250,000 PIP medical are generally available to all Michigan drivers. The remaining choices require the named insured and household members to meet specific health-coverage conditions.
Option 1: Unlimited PIP Medical
This retains unlimited allowable PIP medical benefits for covered auto-accident injuries. It provides the broadest medical limit and does not depend on a health plan paying first.
Option 2: $500,000 Per Person, Per Accident
The auto insurer pays covered PIP medical expenses up to $500,000 for each injured person in an accident. Bills above the limit may shift to health insurance or the injured person, depending on other coverage.
Option 3: $250,000 Per Person, Per Accident
This option works similarly but has a $250,000 PIP medical ceiling. Evaluate rehabilitation, long-term care, attendant care, and health-plan limitations—not only the initial hospital bill.
Option 4: $250,000 With Exclusions
Eligible people can be excluded from PIP medical when they have qualifying non-Medicare health coverage that covers auto-accident injuries. The exact eligibility and documentation rules apply separately to the named insured, spouse, and resident relatives.
Option 5: $50,000 Medicaid Option
This limited option is available when the named insured is enrolled in Medicaid and the spouse and resident relatives have qualifying health coverage, Medicaid, or PIP medical under another auto policy.
Option 6: PIP Medical Opt-Out
The named insured must have Medicare Parts A and B. In addition, a spouse and resident relatives must have qualifying health coverage or PIP medical through another auto policy. Opting out removes auto PIP medical for eligible excluded people; it does not mean every medical bill will automatically be paid elsewhere.
Review the PIP and bodily injury forms linked from the DIFS Insurance Forms page, updated January 27, 2026, before relying on an exclusion or opt-out.
What You Give Up When You Opt Out of PIP Medical
Do not opt out of PIP medical in haste. Option 6 means the auto policy provides no PIP medical coverage for anyone covered by that policy. You must rely on Medicare or other qualifying coverage, subject to that program’s own rules and out-of-pocket costs.
The premium savings can be appealing, but the coverage difference may become significant after a catastrophic crash. Before opting out, compare what unlimited or limited PIP medical can provide with what your health plan or Medicare actually covers.
Attendant Care
PIP medical can pay eligible attendant-care expenses when an injured person needs help with bathing, dressing, medication, supervision, mobility, or other daily needs. Health plans and Medicare may limit the setting, duration, provider, or type of custodial care they cover.
Long-Term Rehabilitation and Custodial Care
A severe brain injury, spinal injury, or multiple-trauma accident can require months or years of therapy and support. Health coverage may impose medical-necessity reviews, visit limits, network rules, or restrictions on long-term and custodial services.
Home and Vehicle Modifications
Eligible PIP medical expenses can include accommodations such as wheelchair ramps, accessible bathrooms, widened doorways, lifts, or vehicle modifications when reasonably necessary because of crash injuries. Traditional health coverage may not pay for these changes.
Transportation and Case Management
PIP medical may cover eligible transportation to medical appointments and professional case-management services that coordinate providers, equipment, rehabilitation, and discharge planning. Those benefits may be limited or unavailable through health coverage.
Provider Choice and Network Restrictions
Health plans often use networks, referral rules, prior authorization, deductibles, copays, and coinsurance. Medicare also has coverage rules and cost sharing. PIP medical is governed by the auto policy and Michigan law, so the available providers and payment structure can differ.
Protection Against Large Out-of-Pocket Costs
Without PIP medical, deductibles, coinsurance, uncovered services, and bills that fall outside Medicare or health-plan rules may become your responsibility. A QHC letter confirms eligibility to make a selection; it does not guarantee that the health plan duplicates every PIP medical benefit.
Coverage Stability
Auto PIP medical remains tied to the auto policy and chosen limit. Employer health coverage can end after job loss, divorce, retirement, or a plan change. If qualifying coverage ends after an opt-out, you must act within Michigan’s 30-day window or risk having no PIP medical protection after that period.
What You Do Not Give Up
The opt-out applies to the medical portion of PIP. Other eligible no-fault benefits, including wage loss, replacement services, survivor’s loss, and certain funeral expenses, can remain in the policy. Still, retaining those benefits does not replace the medical, rehabilitation, and care protection described above.
A March 2, 2026 DIFS consumer advisory specifically warns drivers to confirm that anyone excluded from or opting out of PIP medical has the required QHC, or they may be left without medical coverage after an accident.
Qualified Health Coverage Matters
Michigan law defines Qualified Health Coverage, often called QHC. A non-Medicare health plan generally must cover auto-accident injuries and meet the state’s individual-deductible requirement. Under DIFS Bulletin 2026-08-INS, issued February 2, 2026, the maximum individual deductible is $6,579 for July 1, 2026 through June 30, 2027.
Medicare Parts A and B can support the PIP medical opt-out when all household requirements are met. Medicaid supports the $50,000 option—not the Medicare opt-out. Do not assume that a government or employer health plan qualifies; obtain current written confirmation before selecting an exclusion or opt-out.
If Health Coverage Changes
Coordinate the Policies
Bodily Injury Liability After Michigan No-Fault Reform
Michigan no-fault reform increased the default residual bodily injury liability limits to $250,000 per injured person and $500,000 per accident. Drivers may select other available limits, but the lowest permitted selection is generally $50,000 per person and $100,000 per accident. The out-of-state property-damage component is $10,000.
The current PIP and bodily injury selection forms are available through the DIFS forms library updated January 27, 2026.
Why Higher Liability Limits May Matter
Lower PIP medical limits can increase the possibility that an injured person has uncompensated medical expenses. Michigan law may allow recovery from an at-fault driver in certain circumstances. If a judgment exceeds your policy limit, personal assets and future income may be exposed.
Consider Uninsured and Underinsured Motorist Coverage
For example, these optional coverages can protect you and covered family members when an at-fault driver has no insurance or insufficient liability limits. Review the definitions, limits, exclusions, and whether limits are stacked or non-stacked under the proposed policy.
Mini-Tort Increased to $3,000
For qualifying accidents after July 1, 2020, Michigan’s limited property damage claim—commonly called mini-tort—can be up to $3,000. Limited property damage liability coverage is usually inexpensive and can respond when you owe this amount.
Michigan No-Fault Reform Coverage Checklist
- List every driver, spouse, and resident relative in the household.
- Obtain current QHC, Medicare, or Medicaid documentation when required.
- Confirm how the health plan treats auto accidents and long-term rehabilitation.
- Compare the premium difference between PIP medical options.
- Review bodily injury limits against your income, home equity, savings, and other assets.
- Consider uninsured motorist, underinsured motorist, collision, comprehensive, and mini-tort coverage.
- Update your agent immediately when household or health coverage changes.
- Keep copies of signed PIP and bodily injury selection forms.
For a broader policy review, see our guide to uninsured motorist coverage and request quotes before changing an existing policy.
Michigan No-Fault Reform FAQs
Is Michigan still a no-fault state?
Yes. Michigan still requires a no-fault auto policy with PIP, Property Protection Insurance, and residual bodily injury/property damage liability. The reform changed coverage choices and other rules; it did not eliminate no-fault insurance.
Can every driver opt out of PIP medical?
No. The opt-out is limited to a named insured with either Medicare Parts A and B for option 6, or a Qualified Heatlh Care (QHC) Plan for option 4.
Does health insurance always replace PIP medical?
No. Health policies can have deductibles, networks, exclusions, visit limits, cost sharing, and different coverage for rehabilitation or attendant care. Confirm the actual plan terms before reducing auto medical coverage.
What happens if I make no PIP selection?
Unlimited PIP medical generally applies by default when there is no effective selection. Renewal rules can preserve some prior selections, but coverage requiring health documentation must be supported as required.
Did reform guarantee that every driver’s total premium would drop?
No. The law required statewide average reductions to the PIP medical portion for a defined period. An individual premium still depends on the driver, vehicles, location, limits, deductibles, insurer, and other permitted rating factors.
Should I select the lowest bodily injury limits?
Not automatically. Liability limits protect against covered claims and legal defense costs. Compare the savings with the potential exposure to your assets and income, and consider professional legal or financial advice for your circumstances.
Review Your Michigan Auto Coverage
Customers First Insurance Group can help you compare PIP medical choices, health-coverage requirements, liability limits, and available Michigan auto insurance policies.
Michael Vereecke, CLCS
Agent/President, Customers First Insurance Group
586-221-6870
Source review: Updated July 29, 2026 using Michigan DIFS publications issued or revised between December 2025 and July 2026.
This article provides general insurance information and is not legal advice. Eligibility and coverage depend on current law, policy language, documentation, and individual circumstances.
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Customers First Insurance Group. This article provides general educational information, not legal advice or a coverage determination. Coverage, eligibility, pricing, and claim outcomes vary by policy, insurer, facts, and applicable law. Read your policy and consult a licensed insurance professional about your situation.