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hi everyone my name is zach dillinger and i work in the communications area the department of insurance and financial services or DIFS as we call ourselves with me today is moderator i have our communications manager andrea miller also with us are auto insurance analysts parker fisher and drew simon they will be helping to answer your questions a little bit later on so we’re here to dive a little bit deeper into the changes to auto insurance and help you understand what’s happening and how to move forward so we know the changes can seem big and maybe even a little scary but we want to make sure you know that we’re here to help and that we’re here to make sure that help you make sure to understand the changes that are coming this summer and we will provide you with resources including our website videos publications and you’ll also be able to watch this presentation again later on on our website as we are recording today’s broadcast so let’s get started so first some background about DIFS so we’re fee funded and we don’t require your tax dollars to operate we regulate michigan’s insurance and financial industries which include insurance agents companies mortgage companies deferred presentment companies aka payday lenders state chartered banks and credit unions and our guiding principles are that we’re regulators and that means we work for you as a consumer protection agency so in our day-to-day work we foster economic opportunity for michigan consumers work to provide fair access to institutions that are safe sound and entitled to the public confidence and we also provide financial and insurance education to help people understand their options much like we’re doing here today so now that you know a little bit more about who we are let’s get on to the changes with the insurance law so before we can really get started you have to know that there are three basic parts to a michigan auto insurance policy and they are mandatory which means you must buy them in order to drive legally so those three parts are property protection insurance or ppi personal injury protection medical coverage we call that pip and residual liability liability even i can’t say it anymore liability bodily injury and property damage now as i just illustrated that’s a bit of a mouthful so we call that bipd for short so today we’ll only be speaking about how the new law affects the last two on the screen there you see the big picture changes that the new no fault law makes to the way auto insurance works here in michigan

so for the first time the new law provides drivers with a choice on the level of medical coverage that they want it lowers costs while maintaining the highest benefits available in the nation and it also increases consumer protections so it’s really important that you note that most of the changes we’re going to talk about today take effect for policies issued or renewed after july 1st of 2020 so the first coverage we’re going to talk about is pip and remember that pip medical coverage is mandatory and it pays for medical care if policyholders are hurt in an auto accident so under the old law everybody had to have unlimited pit medical coverage you didn’t have a choice and you did have to buy it to drive legally so now you get a choice to choose the level of pr pip that you want which is right for you so the new limits equal or exceed the highest benefits in the nation and michigan is the only state where unlimited pit medical continues to be an option so the pit medical coverage levels that will be available to you are unlimited coverage per person per accident so this is what you have now up to five hundred thousand in coverage per person per accident up to two hundred and fifty thousand in coverage per person per accident there’s a second two hundred and fifty thousand dollar in coverage per person per accident choice uh the difference between the two is that under this one you are allowed to exclude certain persons from coverage uh we’ll talk about that a little bit more later there’s a fifty thousand dollar in coverage per person per accident option and that’s available if the named insured is enrolled in medicaid and all other household members have qualifying health insurance or another michigan auto policy finally there’s a medical pip opt out which is available if you have medicare parts a and b and all the other members of your household have either qualifying health insurance or another michigan auto policy i’ll tell you what qualifying health insurance is here in a minute so it’s really important that you know that if you don’t make a choice you will default to receiving or i should say continuing to receive unlimited medical coverage which is what you pay for now and you will continue to pay premium for that if you don’t make a specific choice with your agent or company so one of the important points i mentioned earlier is that the new law would lower costs while maintaining benefits and what you see on the screen is one of the most important ways of doing just that so each insurance company will be required for the next eight years to reduce statewide average pit medical premiums uh the amount of reduction depends on the choice and the different levels so for the unlimited option it’s a required average 10 percent reduction for the 500 000 level it’s a 20 reduction for the 250 000 levels it’s a 35 reduction and for the 50 000 option it is a 45 average reduction obviously if you choose the opt out and you have the medicare opt out it’s 100 reduction so in addition to that here are some additional ways that the new law reduces your costs so for the first time we will have a fee schedule so unlike with health insurance or medicare auto insurance previously didn’t have limitations on what a health care provider doctor ambulance whatever could charge for their services so this fee schedule is a required cost control measure and it’s between the auto insurance companies and health care providers and its goal is to make pitt medical care more affordable for consumers the law sets a schedule of fees that can be charged by providers for pip medical services now it’s really important that you know that this provision takes effect after july 1st of 2021 so the other things we’re talking about are 2020 this is 2021. it’s really important that you know that you’re not going to lose care it just means that health care costs will be better controlled also we have the michigan catastrophic claims association assessment now that’s the mcca you’ve probably heard about that in the news or maybe if you’ve seen it on your declarations page the mcca is an association of auto insurers and that’s required by the state legislature and it reimburses member companies for pit medical costs which exceed an identified amount in the event of a catastrophic injury currently that amount is 580 000 so the mcca has already announced that as a direct result of the new law it’s able to lower its per vehicle assessment which starts july 2nd 2020 so this year and this will save michigan drivers at least 120 dollars per car and it’s really important that you know that drivers choosing less and unlimited medical coverage on their new their next renewal after july 1 2020 that you won’t pay any assessment to the mcca going forward if you choose less than unlimited medical so one of the most important parts of the new law is that it increases consumer protections in the insurance market

and it helps us here at DIFS make sure that the market itself is fair so the new law will eliminate certain non-driving factors from the rating process so this means that auto insurance companies will be prohibited from using your sex your marital status your home ownership status your credit score your educational level your occupation and perhaps most importantly your zip code in setting your auto insurance rate now the new law also created the fraud investigation unit and that’s a new unit within our office here at DIFS which now investigates criminal and fraudulent activity related to the insurance and financial markets so those folks work with the attorney general and other law enforcement agencies to prosecute these crimes so now this is kind of a double benefit not only is it a consumer protection but it’s also cost saving because auto insurance fraud drives up premiums for all of us all drivers so the new law also requires prior approval so now auto insurance rates and policies and manuals all must be filed with and approved by office here at DIFS prior to being sold to you as consumers finally the new law also increases fines and penalties so it allows for increased fines in some cases doubling the fine on insurance companies licensed agents and agencies for certain violations of the law so as i said before you will need to choose a coverage level for pip which is appropriate for you based on your needs and your budget so your auto insurance company or agent will give you forms and those forms will describe the benefits and risks of the coverage options that you have so before you make your choice you may want to talk to your auto insurance agent or company or another auto insurance agent or company for that matter to discuss your personal auto insurance needs before you do make that choice so when you do go to make your choice excuse me and fill out your form you may need to bring some information with you that information might include uh something from your health insurer or your employer which identifies individuals covered under the health insurance a statement as to whether that health policy complies with the new law and this is where i was talking about qualifying health coverage before to be considered qualifying health coverage it must not exclude or limit auto accident injuries and it must have an individual deductible of less than six thousand dollars so your policy will have to do that to count as qualifying health coverage medicare and medicaid participants may also need to bring proof of enrollment if you’re going to choose one of the medicare or medicaid coverage levels so i’ve said forms several times i’ve mentioned it this is what the form uh might look like that when that you get it from your agent or your company so it might look a little bit different than what you see on the screen but it will have to contain all of the same information so this sample form is also posted on our website which is michigan.gov forward slash auto insurance uh so you can take a closer look read it at your leisure before you do go in make sure you understand it so that’s it for pip and earlier i mentioned that there are the three mandatory coverages and that we would be talking about too and this is the second and final one we’re going to talk about so another choice you get to make is your level of bipd coverage now as you remember the mouthful name bipd is the portion of your no fault policy that will pay up to certain amounts if the policyholder ieu is found legally responsible for certain damages so it pays for those claims which are made against you currently the minimum bi coverage level is twenty thousand dollars for a person who is hurt or killed in an accident forty thousand dollars for two or more persons in any one accident and ten thousand dollars for property damage in another state so if you sideswipe you know mailbox or something in ohio that’s what that means the new law will allow drivers to choose bodily injury limits that best suit their family needs the old 20 000 per person 40 000 per accident limits believe it or not hadn’t been adjusted for inflation in over 30 years and you know things have gotten a little more expensive in the last 30 years so drivers will now have the choice of purchasing coverage of 50 000 per person and 100 000 per accident or even higher to protect yourselves against the increased potential for lawsuits and if you don’t make a choice there is a default coverage which will kick in if you don’t make another choice and that new default minimum is two hundred and fifty thousand dollars per person per accident and five hundred thousand for two or more persons in any one accident so this is really important you should consider consulting legal and financial advisors to determine your assets your income and what level you might need to protect yourself before dealing with your insurance agent to make a new selection to protect yourself from this new scope of financial liability and like with your pip choice your company or your agent will give you a

form to fill out to make this new bipd choice so the form you see here the pip form i mentioned it might look a little different but for the bi form this is the approved form and the company should give you a form which is identical to this might not say sample on it but should be identical we also have this posted on our website that i mentioned before so you can zoom in and read it and i also want to point your attention to the fact that we’ve produced videos on how to fill out both this bi form and the pip form uh to help you understand what you need to do and you can find those again on our website michigan.gov forward slash auto insurance so uh believe it or not that covers the big changes from the law that we really do need to talk about at this moment um i do want to take some time right now to tell you a little more about DIFS and how we can help you so perhaps the most important thing i can tell you today is that we want to hear from you so we’re not going to be able to answer your individual questions about your specific auto policy or your insurance needs however we do have people in our office well normally in our office but in today’s world we’re all working remotely they are working remotely monday through friday from 8 a.m until 5 pm and those folks can help answer questions whether they’re auto insurance related if you have a general insurance question or even a financial question that those folks can help you our call center is housed within our office of consumer services so office of consumer services also handles all the complaints that are made and that come into our office so if you’re concerned that your auto insurance company is maybe unfairly delaying or denying your claim may be charging you the wrong premium or otherwise just isn’t performing like they’re supposed to when they’re required to under the law so we’re here to help, um DIFS encourages you first to attempt to resolve that complaint or that issue directly with the agent or auto insurance company but if you can’t reach a resolution you can file a complaint with us in writing via email or through our website and you know speaking of websites we have created a new one specific to this new auto insurance law and it helps educate consumers about what’s happening so our new website as i mentioned before is michigan.gov forward slash auto insurance you can see that there on the screen and it includes a way to inform consumers on the changes to the auto insurance law uh some tips for shopping for insurance how to file a complaint and what that complaint process actually looks like what to do if you’re having issues with your insurance company agency or agent and it also has a place to report insurance fraud so this website’s already been updated several times and it will continue to be updated on an ongoing basis to provide the latest information to michigan drivers as we do get closer to that july 1st 2020 effective date now we’re counting down the days now or what a couple months out so we’re getting there and to reiterate uh we do want to hear from you so all of us here at DIFS all the people who are going to be speaking to you today uh we all work for you so we’re here to help you with these new changes and it’s really important to know and mention again that before your next auto insurance renewal after july 1st 2020 agents and insurance companies will supply those forms we talked about those forms will describe the benefits and risks of the coverage options you have and you may also want to consult with your agent or legal advisors and financial advisors to discuss what you need to do so please call or email our office if you have any questions about the forms or anything else related to the new auto insurance law so as you see on the screen there our phone number is 833-ASK-DIFS and we do encourage you please to check out the sample forms uh handouts videos we have a number of resources for you on that website again michigan.gov forward slash auto insurance um so yes that should that should help you make some uh make some intelligent decisions so uh with that i think we’ve hit the highlights and we can now take some of the questions that have typed in the chat system or some that were emailed beforehand so please feel free to ask more questions as they do come up uh and please to remember that your questions about your specific policy should be saved for auto uh for our office analysts we can’t answer those necessarily here right now so with that i’d like to introduce andrea miller who’s going to read the questions and serve as moderator today andrea thank you zach um our first question goes to parker i couldn’t get auto insurance before because i had a big i had to pay a big fine to my insurance company to buy insurance how will i overcome this issue uh hello um thank you for your question so um the new law actually has

a specific protection um for these sorts of drivers um so previously um a lot of people were forced to choose to you know forego insurance if they weren’t able to afford it but the new law offers a new protections that will help people who weren’t able to maintain insurance get insurance so previously insurers could induce a penalty of sorts on people who you know didn’t have insurance earlier um but some the new law now says that it grants a window of time um from start date which is um polish policies issued or renewed july 2nd onwards to january 1st 2022 so within that period of time the new law allows for um no penalties for not previously maintaining insurance so if you had to pay a fine beforehand um you know that that kind of acted as a de-incentivizer for people to get insurance but the new law allows a window of time so you won’t have to face those fines so we encourage you to find insurance without having to face those fines in this in the upcoming time period until january first 2022 thank you parker my next question is for drew can you explain what qualifying health coverage is yeah so basically qualified health coverage or commonly referred to as qhc would just be health and accident coverage that does not exclude or limit coverage for injuries or related to auto accidents and that also has an annual individual deductible of six thousand dollars or less or qualified health coverage could also be coverage under both medicare parts a and b thank you drew our next question comes from jim and goes to parker my wife and i both have medicare parts a and b we are the only members of our household i understand that we can opt out of pip and also will not have to pay the mcca fee if i opt out of pip and use medicare only can i can i be assured that my medicare a and b and my medicare supplement will cover all my medical bills thank you for your question jim so um for those who opt out of pip um we understand and have received confirmation that medicare will pay for medicare-covered services to enrollees who opt out of pip medical and who are injured in an auto accident and don’t have any other available coverage however you know the enrollee will still remain financially responsible for coinsurances co-payments deductibles and any other services medicare does not cover such as transportation to and from medical appointments vehicle modifications or case management services and there are some other things and additionally a medicare supplement a supplement plan could you know have additional coverages that medicare doesn’t cover so um in order to you know really evaluate and make sure that um you have the right coverage um i would encourage you to contact medicare and your medicare and review your medicare plan so you can make that determination to what coverages you would like to be insured for thank you parker my next question is for drew i was injured in 1990 will i still receive my benefits so that’s a good question so if you are already receiving payments from an auto insurance company or auto insurance policy based on having injuries sustained in an auto accident you will continue to receive those current unlimited benefits and that’s even based on the choice that you would make in the future so if you were to choose an option other than unlimited going forward after july you would still receive those those current unlimited benefits that were in effect for that policy that was in place back in 1990 thank you um my next question let’s stick with drew

my current auto insurance policy renewal is in may will the law will the law changes take automatic effect july 1 or do i need to contact my insurance agent for an adjustment yeah so another good question um in terms of having a policy renewed prior to july 1st of this year you would be still underneath the policy terms of that auto insurance policy so the law changes are only effective for policies that are issued or renewed after july 1st so in that sense the best thing that you’d want to do is contact your insurance agent or insurance company directly to discuss the options that you have now after july 1st and if you so choose to want to make those those changes to your policy at that time you would have the ability to do that if you’re fine with the terms that you’re in with that policy starting in may you can wait till your next renewal but if you do want to make those changes then you would want to contact your insurance agent or insurance company after july 1st to do that thank you drew um my next question is for parker what about coordination of benefits i save money now because my health insurance covers auto accidents will i end up paying more now all right thank you for your question so this is a good question so for those of you who don’t know coordination of benefits is when a person coordinates their health insurance with their auto insurance so that in return for a reduced auto premium that the person’s health insurance is the primary payer for the auto accident for medical related expenses so the coordination of benefits itself is a separate consideration that doesn’t necessarily affect your choices under the law so um you know if if your auto insurer chooses to offer coordination of benefits michigan law requires that the auto auto premium should be appropriately reduced thank you parker let’s stick with parker for the next one as well do motorcyclists still get pit benefits if a vehicle is involved in the loss and if so do they get it from their own auto policy all right this is a good question so um for motorcyclists the rule of thumb uh in the order of priority of insurance is generally that if there’s a motor vehicle involved in the accident then they would be able to claim pit benefits from that motor vehicle um it depends on the circumstance of the accident it can be very specific but the general rule of thumb is that you would first claim from the vehicle involved but it is still you know possible if you know such insurance is not available um from the motor vehicle involved it’s possible to claim from their own motor their own motor vehicle policy but generally the first rule of thumb is that it comes from the vehicle involved thank you parker um my next question goes to drew do i have to complete the pip choice form once or do i have to do it every renewal what happens if i forget to complete it so yeah so for the law changes taking effect after after july 1st your insurance company will be required to provide you with the pip choice form so whenever that may be either you’re looking for a new policy after july 1st or if your policy set to renew some time after that date your company will provide that pip choice form and you would want to fill that out and make that pip choice election um the company will be required to provide that to you at renewal for each subsequent renewal after that initial initial choice in the sense of like initially speaking after july 1st if you choose or if you fail to fill out that form they’re going to the insurance company will issue the pip limit at the current unlimited amount so you know depending on which choice you want to make it’s kind of important to initially fill that out similarly if you do make a choice initially after july 1st at each subsequent renewal your company will renew based on the choice that you made that first time so if you forget to complete it after you’ve made that initial choice your your limit will stay the same that you made so um i guess you know the biggest thing would be to make sure that if you’re

trying to to make an update or change your pip limit from unlimited is to do that after july 1st and then if you fail to do it after that you would still maintain that coverage selection that you that you made initially thank you drew uh let’s stick with you for the next one as well what is property protection yeah so property protection insurance or ppi is is one of the main or three components of the auto insurance policy essentially it’s coverage to protect you kind of a liability coverage if you cause damage to other people’s property in the state of michigan so whether that be a fence a building a properly parked car that coverage is going to protect you from someone else um suing you and and trying to hold you personally liable so that property protection insurance the auto insurance company in your auto insurance policy is required to provide up to a million dollars of that coverage thank you drew my next question is for parker i have heard that those on medicare will not be covered in an auto accident is this true all right thank you for your question so this is not true so medicare will pay um for those in an auto accident the two situations you know in which medicare will pay is um either you know if you’ve opted out a pip and you’ve selected that medicare opt-out option they’ll pay in that instance also you know if you choose one of the limited coverages you know of 50 250 or 500 and you know once you’ve reached that pip medical limit medicare will kick in afterwards and make sure it will pay for accident injuries after the fact thank you parker my next question is for drew can you clarify the 250 000 exclusion and how it applies to other household members so very good question um in the sense of what the the option for the 250 000 limit and what that allows some people to do in terms of excluding some or all people in the household so if you’re looking to exclude yourself from from the pip medical coverage of 250 000 that would be based on having qualified health coverage in which we defined earlier in the sense that you have a health plan that doesn’t exclude or limit coverage for auto related injuries and has an annual deductible annual individual deductible of less than six thousand dollars if that’s the case you can choose to exclude yourself if you’re coming underneath that qhc or qualified health coverage and then if anybody else within the household is covered under underneath that qualified health coverage they can also be excluded so it’s it’s really up to you know the individual to decide um whether or not you know based on maybe the cost of insurance and the premium that you’re trying to reduce if you want to exclude some or all people in the household that are covered underneath qualified health coverage if you choose not to exclude the people that aren’t covered underneath health coverage would then have pip medical coverage from their auto insurance company up to that 250 000 limit thank you drew i think i skipped over one that maybe drew can answer i am enrolled in medicare advantage can i opt out of medical coverage yeah so basically medicare advantage you can opt out that that does cover um on the same basis of what medicare parts amd would cover thank you drew looks like we have time for about three more questions um so parker how are children covered when a parent chooses fifty thousand dollars two hundred and fifty thousand dollars or the five hundred thousand 000 option all right thank you for your question um so when we’re looking at these um auto policies coverage typically the rule of thumb is coverage applies to the named insured on the policy the spouse or any resident relative of either so a resident relative of either would be children so um the pip medical limit you select would

apply per person per accident for the household so if you were to select the 500k option that’s 500k in coverage a pit medical coverage per person per accident so that would apply to the spouse the name insured and the kids in the policy so and that would also go for the 250 option and the 50 option but one thing to note for the 50k option um in order to choose that option you need to make sure that any that you know that the named insured has medicaid and that all spouses or resident relatives have some other qualified health coverage are are in medicaid or have some other coverage under another pip medical policy thank you parker my next question is for drew can a person purchase insurance from another state if we live in michigan example buy from indiana ohio or minnesota so interesting question i mean in the general sense of purchasing insurance if you’re looking to purchase a michigan auto policy because you live in the state of michigan and you want to drive legally in the state of michigan you’re not going to be able to go buy you know an indiana ohio minnesota policy and be considered to be driving legally um and that’s based on you know having your your vehicle and everything registered in the state of michigan from the standpoint of working with an insurance agent or an insurance company i mean there are insurance agents that are licensed as non-resident producers that may be domiciled in those states that work on behalf of insurance companies that sell michigan auto insurance policies so i guess in one way you know it could be potential that you could buy insurance from somebody from another state but it would have to be a michigan auto insurance policy um you know from a legal standpoint so you know i guess i don’t know from what standpoint you’re asking that question but the biggest thing that i would take away from that is that you need to make sure that you’re buying a michigan auto insurance policy if you live in the state of michigan thank you drew um it looks like we have time for one last question um this one goes to parker when can i start to get a quote with the new law applied all right hello thank you for your question um so um the law goes into effect for policies issued or renewed after july 1st but you you know you may be able to get a quote a little bit beforehand um so the department of insurance and financial services we approve rates before they’re able to be sold on the market so we are working diligently on approving all the new um rates that will become of this new law so so subject to our approval um and after we’ve approved them that they will be able to start you know advertising and start um you know possibly quoting but they won’t be able to actually sell you the policy until the effective date which is for policies issued or renewed after july 1st so um you yeah it’s possible to get a quote a little bit beforehand a little bit before that effective date but um you won’t be able to actually have that policy until the effective date of the law thank you parker and thank you drew um with that i’m gonna turn this back over to zach to close us out for the evening great thanks andrea and thank all of you for attending today uh as you might expect we received a number of questions and we simply run out of time so if we didn’t answer your questions directly we do apologize but uh please email your written questions to the email address auto insurance at michigan.gov you see that flash up on the screen now and also check back to the faqs which are posted to our website which we will update and have updated already based on questions we’ve gotten at these events so that website again for the last time is michigan.gov forward slash auto insurance so you can also connect with us on social media linkedin facebook twitter and a youtube page uh we have a lot of great content out there uh helping people understand

uh the new changes to the auto insurance law so a special thanks to our moderator andrea miller our producer director ian oberg and especially to parker fisher and drew simon for answering questions today so thanks again everybody for being here and please stay safe you

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