Prior to the new auto insurance reform law that went into effect on July 1, 2020, your personal injury protection (PIP) coverage provided unlimited benefits. The rising costs of continuing this level of coverage led lawmakers to implement a change. This law is why you have the ability to choose between various levels of PIP coverage. However, it also means that if your PIP benefits are exhausted before you fully recover from a car crash, you could actually end up paying more out of pocket.
Jay Trucks talks about what the new priority payment rules are following a car accident and how your medical costs are paid once your PIP limits are exhausted.
Having an attorney represent you after a car crash can help to make sure you recover the maximum amount of compensation available to you if you suffered serious injuries. Contact our law firm today to learn more – it costs you nothing to learn about your legal options.
PIP Benefits At a Glance
At a high level, Michigan PIP benefits, which are paid through your own car insurance company after a car crash, provide the following no-fault benefits – up to the limits of your policy:
- Payment of all related medical costs – paid even if you share any fault for the crash
- Medical travel – covers the cost of traveling to and from your medical appointments
- Lost wages – Provides up to 85 percent of wages while you are unable to work
- Attendant care – Pays up to 56 hours per week to help accident victims with personal care
- Replacement services – Pays up to $20 per day to help injured victims with household tasks
Who Pays What First?
This process is confusing for many Michigan policyholders. To provide a more accurate answer, you need to be able to answer the following questions:
- What PIP option did you select when you purchased your car insurance policy?
- Do you have coordinated or uncoordinated benefits?
- Are you covered under your own policy or through a spouse or relative who lives in your home?
The priority rules for who pays for your medical costs – and when – also changed under the new auto reform insurance law. Regardless of the order that applies in your situation, it is important that you file your no-fault auto insurance claim immediately after the accident – or at least within your providers deadline.
Here is what you need to know about the current priority rules:
Coordinated Benefits
- Health insurance: If you selected coordinated auto no-fault insurance coverage, your medical bills will be covered by your health insurance first. Depending on the type of coverage you have, this can be risky. For example, if you have lifetime maximums that get tapped out for your car crash injuries, you may have no benefits left to pay for other medical issues.
- No-Fault PIP Benefits: Once your health insurance is exhausted, your no-fault benefits will kick-in for your remaining costs – again, up to the limits of your policy.
If you get laid off from work and lose your health insurance, your no-fault benefits immediately apply and your auto insurance provider would pay first. However, in this situation, they may charge you a higher medical deductible than what you would have paid if you still had health insurance.
Uncoordinated Benefits
At Jay Trucks, we strongly recommend uncoordinated benefits. In this situation, your payment priority rules after an accident apply as follows:
- No-Fault PIP Benefits: Your PIP will cover the medical costs for your crash – up to policy limits.
- Health insurance: If your private health insurance provider pays for injuries caused by a car crash (some may not), then this will be your next source of coverage for your injuries.
Do Medicare or Medicaid Cover Pay For Medical Costs?
Neither Medicare nor Medicaid are meant to be used to cover medical costs after an accident. Under federal law, both are classified as secondary payers. Sometimes an insurance agent may ask an accident victim to tell them if they have other insurance that may apply. However, in this situation, it is important to understand that neither of these options should be mentioned to your insurer as another type of health coverage.
If your medical costs do end up being paid by either Medicare or Medicaid, you will be required to pay that money back. A bigger issue is that it may also mean that your auto insurance carrier or health insurance provider are not paying when they should be. This error is something you should immediately discuss with your attorney.
How Do I Pay My Medical Costs When My PIP Runs Out?
Once your PIP and other insurance options are depleted, you may be eligible to pursue additional damages that are not available or part of your no-fault insurance benefits. These additional damages include:
- Pain and suffering
- Emotional anguish
- Loss of enjoyment of life
- Disfigurement or scarring
- Humiliation
- Mental trauma
- Disability
- Post-traumatic stress disorder
In order to pursue a liability claim for these non-economic damages, however, you must first meet the state’s injury threshold. If you are unsure whether you may be eligible for any of these additional damages, you can speak with one of our experienced attorneys for a free case assessment.
Contact Jay Trucks for Legal Help
Pursuing compensation for your injuries, whether through your no-fault benefits or through a liability claim, our Grand Rapids car insurance lawyers are prepared to help. We have the resources and staff to investigate and determine all potential sources of compensation to help you obtain a maximum recovery after an accident caused by a negligent driver.
Find out whether you may have a valid case in the free legal consultation we offer. There is no pressure to hire our services after this free meeting, so there is no risk in getting the information you need. If we do represent you, there is nothing to pay upfront. We do not get paid until your case concludes – and only if we recovered compensation for you.
