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Michigan's no-fault reform explained
What Michigan's 2019 auto insurance law changed: PIP choice levels, a Medicare-based medical fee schedule, a smaller MCCA fee and limits on rating factors.
Michigan's 2019 reform, Public Acts 21 and 22 of 2019, ended the rule that every driver had to buy unlimited lifetime medical coverage after a crash. Since July 1, 2020, drivers choose a personal injury protection (PIP) medical limit; since July 1, 2021, hospitals and doctors have been paid under a fee schedule tied to Medicare; and the per-car catastrophic claims fee has fallen. Michigan is still a no-fault insurance state, and unlimited PIP is still available to anyone who wants it.
This guide explains what the law changed and what it means after a crash. For what Michigan drivers now pay and why, see Why Michigan car insurance costs what it does.
The reform at a glance
| Date | Change |
|---|---|
| June 11, 2019 | 2019 PA 21 and PA 22 take effect; the PIP choice section (MCL 500.3107c) is added |
| July 1, 2020 | PIP choice levels, required PIP premium reductions, new default liability limits and a $3,000 mini-tort apply to policies issued or renewed after this date |
| July 1, 2021 | Medical fee schedule begins: most providers paid no more than 200% of what Medicare pays |
| July 1, 2022 | Fee schedule ceiling drops to 195% of Medicare |
| July 1, 2023 | Fee schedule ceiling drops to 190% of Medicare, the long-term level |
| July 2026 | MCCA fee is $84 per vehicle with unlimited PIP and $19 with any other level |
Sources: the Michigan Legislature (MCL 500.3107c and 500.3157), the Department of Insurance and Financial Services (DIFS) and the Michigan Catastrophic Claims Association.
What changed: PIP choice
Before the reform, every Michigan policy carried unlimited lifetime PIP medical benefits. MCL 500.3107c now offers four limits per person per accident: $50,000, $250,000, $500,000 or unlimited. Unlimited is the default if you do not choose, and some options depend on your other coverage:
- $50,000 is available only if the named insured is enrolled in Medicaid and household members have qualifying health coverage, Medicaid or their own auto coverage.
- $250,000 with exclusions lets household members with qualifying health coverage be excluded from PIP.
- Opting out of PIP medical entirely is limited to a named insured with Medicare Parts A and B, with household members covered elsewhere.
Rideshare companies must choose $250,000, $500,000 or unlimited for their drivers' coverage. To lock in the savings, the law required insurers to cut average PIP medical premiums for eight years from July 2020: at least 45% for the $50,000 option, 35% for $250,000, 20% for $500,000 and 10% for unlimited, according to DIFS.
What changed: the medical fee schedule
The second big lever was price controls on providers. Under MCL 500.3157, a provider treating someone under PIP cannot charge more than a set percentage of what Medicare pays for the same treatment:
| Treatment after | Most providers | Providers with a high share of low-income patients, and freestanding rehab facilities | Level I or II trauma centers (emergency care before stabilization) |
|---|---|---|---|
| July 1, 2021 | 200% of Medicare | 230% | 240% |
| July 1, 2022 | 195% | 225% | 235% |
| July 1, 2023 and later | 190% | 220% | 230% |
Where Medicare has no payment amount for a service, the law caps charges at a percentage of the provider's January 1, 2019 charges instead, between 52.5% and 78% depending on the type of provider. The law also added utilization review, so insurers can question treatment that is not medically necessary.
The fee schedule has been litigated, especially as applied to people injured before the reform who need lifelong attendant and residential care. The MCCA said in its 2026 annual report announcement that its unlimited-PIP costs rose partly because of court decisions on the 2019 law, and because long-term care costs have grown faster than inflation.
What changed: the MCCA fee
The Michigan Catastrophic Claims Association, created in 1978, reimburses insurers for the most expensive PIP claims and is funded by a fee on every insured vehicle. Before the reform the fee was $220 per vehicle. From July 2026 it is $84 if you choose unlimited PIP and $19 if you choose any other level, because policies with capped PIP generally cannot produce claims large enough to reach the MCCA. The MCCA says it reimbursed $1.23 billion in claims in its most recent year and $25.6 billion since 1978.
What changed: liability and lawsuits
Lower PIP limits mean an injured person's own coverage can run out, so the reform pushed liability coverage up:
- Default bodily injury liability limits on a new policy are $250,000 per person and $500,000 per accident. You can choose lower limits, down to 50/100, only by signing the selection form insurers must provide.
- Suing for excess medical costs. If an injured person's PIP limit is used up, they can sue the at-fault driver for medical expenses above it. Higher liability limits protect you from that claim.
- Pain and suffering still requires death, serious impairment of body function or permanent serious disfigurement, the state's tort threshold. Michigan bars noneconomic damages if you are more than 50% at fault (MCL 600.2959).
- The mini-tort lets you recover up to $3,000 from an at-fault driver for vehicle damage your own insurance did not pay, for crashes after July 1, 2020 (MCL 500.3135).
What changed: how insurers can set prices
Under MCL 500.2111, Michigan auto insurers may not base rates on sex, marital status, home ownership, education, occupation, the postal zone where you live or your credit score. Territory rating is still allowed. The reform also moved Michigan auto rates to prior approval: DIFS must approve them before insurers use them. See how car insurance rate approval works.
Did it work?
A December 2025 report by Milliman for DIFS estimated average savings of $357 per vehicle, mostly from a $369 average drop in PIP costs, and found that Michigan's uninsured motorist rate went from 5.4% above the national average before the reform to 3.9% above it afterward. The Insurance Research Council still estimated 22.3% of Michigan drivers were uninsured in 2023, the fourth-highest rate in the country, so the uninsured problem is far from solved (see uninsured drivers by state).
Choosing your coverage under the new rules
Say a household of two adults, both with employer health insurance, is renewing. A hypothetical way to work through the choice:
- Read the health plan. Lower PIP levels are safe only if the health plan covers auto injuries without excluding them. Ask the insurer for the documentation it needs; DIFS sets the qualifying-coverage rules.
- Think about catastrophic care. Health plans have network rules and may not pay for long-term attendant care, home modifications or lost wages, which unlimited PIP does. Weigh that against the premium difference for each household member.
- Price unlimited, $500,000 and $250,000 side by side from the same insurer, and note the MCCA line on each quote: $84 versus $19 per car from July 2026.
- Keep liability limits at the 250/500 default or higher whichever PIP level you pick, because other drivers' PIP may be limited too. The How much car insurance do I need? can help.
- Remember the deadlines. PIP claims generally must be noticed or filed within one year of the accident (MCL 500.3145); lawsuits for injury or property damage have three years. See statutes of limitations for car accident claims.
Questions about the choices, or complaints about how an insurer applied them, go to DIFS at 833-ASK-DIFS (833-275-3437) or michigan.gov/difs. The Michigan state guide covers the rest of the state's requirements.
Key takeaways
- Since July 1, 2020, Michigan drivers choose a PIP medical limit; unlimited lifetime coverage remains the default and is still available.
- A fee schedule caps what providers can charge auto insurers, now 190% of Medicare for most providers since July 1, 2023.
- The MCCA fee fell from $220 per car to $84 with unlimited PIP or $19 with any other level from July 2026.
- Default liability limits rose to 250/500 and the mini-tort to $3,000, because injured people can now sue for medical costs above their PIP.
- Michigan bans rating on sex, marital status, home ownership, education, occupation, ZIP code and credit score, and requires prior approval of rates.