Michigan has a complex history of automobile no-fault insurance. Generally, the unlimited medical benefits for claimants have both positive and challenging aspects and have been the topic of many discussions in the industry. As of this past spring, Michigan’s Legislature created a new law that fundamentally changes portions of no-fault coverage for claimants in the state according to Michigan Auto Law’s May 2019 blog post.
It is extremely important that insurance companies understand these changes to the coverage that were signed into law earlier this year. There are several critical updates, but one in particular involves the unlimited medical benefits. Prior to this new update no auto insurance policy sold in Michigan contained a cap or limit on the amount of medical benefits a claimant received if he or she was injured in an auto accident.
Now, insureds will be given benefit options to choose from when they renew their policy or purchase a new policy. The unlimited benefit option will still be available but according to the previously mentioned blog post by Michigan Auto Law, other benefit levels will be available as well.
Related to this change is the update for claimants who also have Medicare coverage. People with Medicare policies will now be given the option to essentially opt out of their medical benefits under their auto insurance policy. Again, this change will be implemented for renewing policies as well as newly written policies.
One other critical component of the changes to the no-fault laws involves lawsuits that pertain to medical expenses. If a claimant is injured in an auto accident once these changes have taken effect and the other party caused the accident, the claimant will now be allowed to file a lawsuit if his or her medical expenses are not fully covered by the other party’s lower no-fault benefits. This situation depends on the amount of medical expenses and whether the other party chose a lower benefit limit of course but represents a potential for increased costs to insurance companies.
While these changes directly impact insureds, it is vital that insurance companies understand the potential impact the changes might have. For instance, adjusters need to stay updated on the changes in order to efficiently administer claims and continue to ensure claimants are indemnified. More time may also need to be spent by claims staff explaining benefit limits to injured claimants, especially just after the laws take effect.
Though the changes may be complex, Northwood is an experienced third-party administrator (TPA) of automobile no-fault claims and will help guide your insurance company and your claimants through these changes. Ultimately, partnering with Northwood will help maximize efficiency, satisfy claimants and help hold down claims costs for your company.
Schedule a call with Rosanne Brugnoni at 586-755-3830 ext. 3771 for a more customized look at the impact these changes may have on your company.
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