MICHIGAN NO-FAULT INSURANCE REFORM - Senate Bill No.1
With the recent passing of Senate Bill No. 1, we felt it was important to share some potential gaps/limitations in coverage that some of your existing policyholders may have. It is Eaton Insurance Services interpretation along with legal opinions we have received that the following coverage gaps/limitations apply effective June 11, 2019.
- Named drivers who reside with the named insured and are not a relative are subject to PIP coverage through the Michigan Assigned Claims Plan (MACP) with a limit of $250,000.
- Named drivers, related or not, who reside outside of the named insured’s residence, (other than student away) are also subject to PIP coverage through the MACP with a limit of $250,000, unless the following applies:
- The named driver resides outside the named insured’s residence with another relative who has an active Michigan auto policy. The PIP coverage under the relative’s policy should then respond.
- Occupants/Passengers/Pedestrians who are not a named insured, spouse or resident relative will no longer be able to claim PIP benefits through the named insured’s policy. They will now seek coverage from the MACP, unless there is another auto policy that responds.
In summary, if the injured party making a claim for PIP benefits is not a named insured, spouse of a named insured or resident relative of the named insured, The specific insurance carrier of that policy, will be sending these claims to the MACP with a limit of $250,000, unless there is another auto policy that would respond as mentioned above.
All of the above is our interpretation at this time as we continue to learn and get clarification on this new law. We will be monitoring this topic and communicating with our Insurance Carriers for new developments. Once we have learned more, we will pass it along.
Here is a link to MI.GOV for the Michigan Legislature: http://www.legislature.mi.gov/(S(xkbhnkeat4bfrasjh0mb5rq4))/mileg.aspx?page=GetObject&objectname=2019-SB-0001