An auto accident lawyer tells you what No Fault insurance you should buy

Yesterday, I wrote about Allstate’s new $10,000 deductible on No Fault medical benefits. It’s the result of the Michigan Legislature removing the $300 maximum medical deductible from the No Fault Act a few years ago. And now, we’re starting to see auto insurance companies introducing significantly higher No Fault deductibles. This is going to cause terrible problems for many people when get injured in serious automobile accidents and can’t afford the medical deductibles that they have. The problem with these high No Fault deductibles is that they’re going to appeal most to the people who can least afford them if they ever do get injured in a car accident.

Which leads me to today’s blog. People always ask me what kind of auto insurance they should buy.  I always talk about the importance of uninsured and underinsured motorist (UM/UIM) benefits, no matter what kind of auto insurance you have. No one ever thinks they will be hurt in a terrible car crash.  But for thousands of people every year, this is precisely what happens and having UM and UIM coverage becomes critically important to protect yourself from all of the uninsured drivers on the road today.

And then I talk about making sure you’re buying primary and not coordinated auto coverage. That’s when I start getting the blank looks.

Most people have never heard of primary PIP No Fault. Unless you’re a lawyer who litigates these motor vehicle accident cases, or an insurance claims adjuster (or married to a lawyer or adjuster), chances are you’ve never heard of primary No Fault PIP either. But it’s one of the best things you can do to protect yourself and your family if a car accident occurs.

Most auto insurers separate medical and wage loss based on which insurer pays first: Either the auto insurer, the health insurer, or the short- and long-term disability insurers. The one that pays first is “primary.” The one that pays second is “coordinated” or “excess” to the one that pays first.  Almost everyone today has coordinated (excess) auto No Fault policies in Michigan.

For example, here’s an example I see so often with my own clients. Let’s say you have a coordinated (excess) medical and primary wage loss on your auto No Fault insurance policy.  This means for medical expenses, your health insurer pays first and then your auto insurer pays the balance for all medical bills incurred if you’re injured in a motor vehicle accident. For wage loss, even if you have a short-term disability plan, the auto insurer will still pay your full wage loss, regardless of the disability plan.

This is what most people do. Most people elect coordinated insurance.  It’s so common that most auto insurance agents don’t even tell people about the possibility of electing primary coverage.

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