Michigan’s no-fault law changes took effect on July 1, 2020 under Public Acts 21 and 22 of 2019, and they rewrote the rules every driver in the state operates under. The headline change: drivers no longer have to buy unlimited lifetime medical coverage. You now choose from six Personal Injury Protection (PIP) levels, pay a smaller catastrophic-claims fee, and carry higher default liability limits. The reform also capped what medical providers can charge, tripled the mini-tort recovery for vehicle damage, and added a one-year deadline that can wipe out unpaid benefits if you wait too long to sue your insurer. Here is what each of those changes means when you renew your policy or file a claim.
The Six PIP Medical Coverage Choices
Before the reform, every Michigan policy carried unlimited PIP medical benefits. Now you pick a level. The options under MCL 500.3107c and MCL 500.3107d are:
- Unlimited coverage, the same protection all Michigan drivers used to carry.
- $500,000 per person per accident.
- $250,000 per person per accident.
- $250,000 with coordinated exclusions, available when your health insurance covers auto-accident injuries.
- $50,000 per person per accident, reserved for Medicaid enrollees whose spouse and resident relatives also have qualifying health coverage, Medicaid, or their own PIP.
- A full opt-out with no PIP medical coverage, available only to drivers enrolled in both Medicare Part A and Part B, with the same household-member requirement.1Michigan Legislature. Michigan Code 500.3107c2Michigan Legislature. Michigan Code 500.3107d
Any choice below unlimited requires a coverage-selection form approved by the Director of the Department of Insurance and Financial Services (DIFS). If you take the Medicare opt-out and later lose Medicare eligibility, you have no auto-insurance coverage for accident-related care until you update the policy.
Qualified Health Coverage
Several of the lower tiers require household members to carry what the statute calls qualified health coverage. From July 1, 2026 through June 30, 2027, a plan qualifies only if it does not exclude motor-vehicle-accident injuries and has an annual deductible of $6,579 or less.3Michigan Department of Insurance and Financial Services. Bulletin 2026-08-INS – Qualified Health Coverage Deductible Adjustment DIFS adjusts the threshold using the medical component of the Consumer Price Index, but only when the change reaches $500. Many employer plans qualify. High-deductible plans tied to health savings accounts often do not.
Required Premium Cuts and a Smaller MCCA Fee
Public Act 22 of 2019 did not leave pricing to the market. It directed insurers to reduce PIP premiums by set percentages measured against May 1, 2019 rates:4Michigan Legislature. 2019 Public Act 22
- At least 45% off the $50,000 Medicaid tier.
- At least 35% off the $250,000 tier.
- At least 20% off the $500,000 tier.
- At least 10% off the unlimited tier.
The mandate runs on policies effective before July 2, 2028. DIFS reviews rate filings, but whether every carrier has consistently hit the targets is a separate question from what the statute requires.
Each insured vehicle also pays an annual Michigan Catastrophic Claims Association (MCCA) assessment that funds long-term care for the most severely injured victims. For 2026–2027 the MCCA charges $84 per vehicle on unlimited PIP policies and $19 per vehicle on all other tiers.5Michigan Department of Insurance and Financial Services. Choosing PIP Medical Coverage Before the reform that fee exceeded $200 per vehicle because every policy was unlimited.
Higher Default Liability Limits
When the law let drivers cut their own medical coverage, it also raised what you must carry to pay for injuries you cause to others. The old minimums of $20,000 per person and $40,000 per accident were among the lowest in the country. The new defaults are $250,000 per person and $500,000 per accident. You can drop to $50,000 per person and $100,000 per accident, but only by signing a written waiver that acknowledges the reduced protection.6Michigan Legislature. Michigan Code 500.3009 Without that waiver, the higher default applies automatically.
If you cause a crash and the injured person’s bills blow past your liability limit, you are personally responsible for the difference. That can mean wage garnishment, asset seizure, or a judgment that follows you for years. Your liability coverage also pays for your legal defense if you are sued, so the default limits are doing two jobs at once.
Why UM and UIM Coverage Matters More Now
With everyone on unlimited PIP, the other driver’s coverage barely mattered to your medical care. That math changed. If you pick a $250,000 PIP limit and a lightly insured driver puts you in the ICU for weeks, your PIP can run out while treatment continues.
Uninsured motorist (UM) coverage pays when the at-fault driver has no insurance. Underinsured motorist (UIM) coverage pays when their liability limits are too low for your actual damages. Neither is required under Michigan law. Both became much more valuable the moment drivers could legally carry as little as $50,000 in PIP and $50,000 per person in liability. If you traded down on PIP to save money, UM and UIM are among the cheapest ways to buy back the protection you gave up.
Mini-Tort Recovery Tripled to $3,000
Michigan’s no-fault setup normally sends vehicle-damage claims to your own policy. The mini-tort exception lets a not-at-fault driver recover limited out-of-pocket costs, like a collision deductible, directly from the at-fault driver. For crashes after July 1, 2020, that cap went from $1,000 to $3,000.7Michigan Legislature. Michigan Compiled Laws 500.3135 (2025)
To collect, you must be no more than 50% at fault, and you can only recover damage your own insurance did not cover. The $3,000 is a hard ceiling. Most drivers pursue these claims in small claims court without a lawyer.
The One-Year-Back Rule
If you have to sue your insurer to collect PIP benefits, MCL 500.3145 bars you from recovering benefits for losses that happened more than one year before you filed the lawsuit.8Michigan Legislature. Michigan Code 500.3145 If your insurer stops paying your bills and you wait 18 months to file suit, you have permanently lost the first six months of unpaid care.
Every month of delay is a month of benefits you may never see again. If you are already fighting your insurer over PIP payments, treat this deadline as urgent.
Caps on What Medical Providers Can Charge
MCL 500.3157 ties provider reimbursement to Medicare. The cap phased in at 200% of Medicare in July 2021, 195% in July 2022, and 190% after July 1, 2023.9Michigan Legislature. Michigan Compiled Laws 500.3157 (2025) Certain smaller or rural facilities can bill up to 220% of Medicare. Level I and Level II trauma centers can bill up to 230% for emergency care before the patient is stabilized and transferred. When a procedure has no Medicare code, reimbursement is capped at a percentage of what the provider charged on January 1, 2019.
The reform also limits in-home attendant care provided by a relative, household member, or someone with a prior personal or business relationship with the injured person. Insurers must pay for no more than 56 hours per week, matching Section 315 of Michigan’s Worker’s Disability Compensation Act.10Michigan Legislature. Michigan Code 500.3157 Professional caregivers from nursing agencies or home-health companies are not bound by the weekly cap, though their rates still fall under the fee schedule. An insurer can voluntarily pay for more hours. The statute does not require it.
Pre-Reform Injuries Are Treated Differently
If you were already receiving no-fault benefits for an injury sustained before June 11, 2019, the fee schedule and attendant-care cap work differently for your care. The Michigan Court of Appeals held that those limits cannot be applied to treatment for pre-reform injuries. The decision was appealed to the Michigan Supreme Court, which indicated that the Court of Appeals ruling carries precedential effect while the case is pending.11Michigan Department of Insurance and Financial Services. Frequently Asked Questions For now, those limits do not apply to pre-2019 injuries.
DIFS has stated that the reform did not change the benefits or services an auto-accident victim is entitled to, regardless of injury date. What changed is what providers can charge for them going forward.
The Assigned Claims Plan Now Has a Cap
The Michigan Assigned Claims Plan covers people with no applicable auto insurance after a crash. Benefits through the plan used to be unlimited. Under the reform they are capped at $250,000, the same figure as the MCL 500.3107c(1)(b) tier.12Michigan Legislature. Michigan Code 500.3172 One narrow exception: if the injured person had qualified health coverage that lapsed within the previous 30 days, the cap rises to $2,000,000.13Department of Insurance and Financial Services. Order No. 19-049-M – Effective Date of the Cap on PIP Benefits Provided Under the Michigan Assigned Claims Plan Once that cap is exhausted, the injured person falls back on private health insurance, Medicaid, or personal resources.