by Heather Mosher

Understanding PIP [Personal Injury Protection]


WHY ARE MY AUTO RATES GOING UP?!  This is a common question that we hear from clients.  One of the reasons we are seeing increases in Michigan is due to Personal Injury Protection coverage (PIP).

In the insurance world today, especially in the State of Michigan, the discussion of Personal Injury Protection has never been more important.  It is Michigan Law that every vehicle has PIP, which covers medical costs and lost wages in the event of an accident.   Medicare/Medicaid does not cover injuries sustained in an auto accident.  This means insurance companies, in the unfortunate event of an auto accident, must provide unlimited medical benefits to those injured.  These medical benefits must be paid for life. In fact, some companies are still paying on claims from the 1970’s.  This makes PIP claims extremely expensive, costing millions of dollars per year.

HOW DOES THIS PERTAIN TO YOU?  In its most basic form, insurance is the pooling of risk and the premiums everyone pays. These pooled resources pay for the claims of the few.  Rising costs along with the amount of PIP claims being received is one of the main reasons why premium rates continue to rise, even if you have never filed a claim.

WHAT CAN YOU DO? It’s obvious that the system for PIP is unsustainable.  If things continue on their current course, insurance rates will keep growing. The best thing that you can do is educate yourself. By reading things like this and also doing your own research you can get a better grasp on this complex situation. Always remember that knowledge is power.  You may also contact your State Representative to express your opinion on Personal Injury Protection coverage in Michigan.

RESOURCES
A Consumer’s Guide To No-Fault Auto Insurance In Michigan
http://www.michigan.gov/documents/cis_ofis_noflt_gd_25094_7.pdf

Michigan Office of Financial and Insurance Regulation
http://www.michigan.gov/lara/0,4601,7-154-35299_10555—,00.html

Michigan House of Representatives Website

Michigan Association of Insurance Agents
https://michagent.org/EWEB/DynamicPage.aspx?webcode=AD_News

To learn more about VAST Personal Insurance contact Heather Mosher at 906-315-7235 or atheatherm@vastsolution.com.

National healthcare open enrollment starts November 1st and ends on December 15th. To make an appointment with one of our trusted advisors please contact us at 906.228.7500.

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