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Michigan No-Fault Insurance: What is PIP?

At Ieuter Insurance Group, we believe that an informed consumer is a smart consumer. We’d like to take this opportunity to explain a very important aspect of your coverage. No-Fault auto insurance is required by law in the state of Michigan. This means that in the event of a loss, each individual involved goes to their own auto insurance carrier to cover any cost or damages. This includes medical expenses, lost wages due to injury, or death benefits to family members for up to three years. Because of the high standard of coverage required, it is easy to get confused about the parts of an auto insurance policy and what you are paying for.

There are three basic parts of no-fault insurance:

1. Personal Injury Protection (PIP)

2. Property Protection (PPI)

3. Residual Liability – Bodily Injury and Property Damage. (BI/PD)

Personal Injury Protection or PIP is the part that covers any medical expenses due to an auto accident. Insurance carriers in most cases are responsible for paying medical costs up to $500,000 but each policy can have different limits of coverage. There are two options for PIP coverage – excess and full.

When your policy is set to Excess PIP it means that your benefits are coordinated with your primary health insurance. Coordinated with medical means that your health insurance will pay first to help cover the cost of injuries due to an auto accident. If you have primary health insurance through your employer, this often helps reduce the premium cost. Any expenses that your health insurance does not cover will then be covered by the PIP portion of your auto insurance. Please note: neither Medicaid nor Medicare will pay for medical expenses due to an auto accident. These programs do NOT coordinate benefits with PIP.

Full PIP medical coverage means that if you incur expenses due to an auto accident, your policy will respond by covering all of the related bills. This premium setting for your coverage will be slightly higher than the excess setting because the insurance carrier is responsible for all expenses related to an auto accident. You may want to check with your employer and/or health insurance carrier to determine which of these coverages is right for you and your family.