Resident expert and club member Chip Moore enlightened the audience today on the recent changes to the state’s car insurance law to take effect next July 1.  Chip said he was glad he was speaking on Halloween because insurance was a scary topic!!! Boooooo!

Already there have been lawsuits against the State of Michigan, he said, and it hasn’t even gone into effect! Chip gave everyone a handout with details of the new law. Ratings, he said, is an important issue when it comes to auto insurance and starting July 1 of next year, insurance companies will no longer be able to do that. Chip interjected that he really didn’t think insurance rates overall would come down with this new law due to the new “minimum liabilities” available in this new law. He said he saw more of an opportunity for lawyers to litigate any number of cases that would now occur.

Any driver in Michigan who is hurt in an accident when the new law takes effect will have unlimited coverage in terms of medical expenses, help from others who will need to do work for you, build a ramp, or take care of you because of your injuries not normally covered by their regular health insurance. Starting July 1 you will have a choice: choose unlimited coverage, select $500k of coverage, or $250k, or if you are on Medicaid, it can go down to $50k. Chip suggested that you review what you’re paying now for your liability since he anticipates that figure going up next year.

Starting next year, Chip said, every time your auto insurance renews, you will have to sign a paper stating your limits of liability, and what kind of PIP coverage you want which involves a lot of paperwork compared to how we do it now. Regarding Long Term Care coverage, your current policy covers it. Next July 1, if you choose any other coverage option except “unlimited” that goes away.

Another important but often overlooked issue regarding your car insurance, Chip said, was “the name of the insured”, Chip said, includes the names of everyone in your household. Currently, if you have a child who is named as an “insured” but they live in another state, they would still be covered under your policy. However, next July they could be named as an insured but could be denied coverage because they do not live under your roof!  

Chip concluded his presentation by saying that the “mini tort” language will change with the new law. Currently you may sue the driver who caused your accident up to $1,000. Under the new law, the amount goes to $3,000!