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June 19, 2020
The No-Fault world is about to enter the next phase of No-Fault reform. July 1, 2020, will mark the official end of an era. See the attached “2019 No-Fault Reform Effective Dates.” The mandate of unlimited PIP coverage is over. With these changes, claims professionals are going to have to re-adjust the way they think about claims.
The most significant of these changes is with policy coverages. Specific forms are required that must be used to select these coverages. The Department of Insurance and Financial Services (DIFS) issued Bulletin 2020-03 on January 17, 2020. It provides the Choice of Coverage Limit Forms for bodily injury and PIP. While insurers are required to use the DIFS Bodily Injury Choice Forms, insurers may utilize their own PIP Choice Form provided it is first approved by DIFS. Note, the changes to limits only apply to PIP benefits for allowable expenses.
For all policies issued or renewed after July 1, 2020, the applicant or named insured must now select a level of coverage for allowable expenses under section 3107(1)(a). If someone selects a coverage limit other than unlimited, the carriers are required to offer a rider that provides coverage for attendant care in excess of the applicable limit. The minimum bodily injury limit in these policies will also be raised.
There will also be a process in the event that a policy is issued or renewed and an effective selection of coverage has not been made.
Additional changes to the statute include an increase in the Mini Tort damage limits for accidents occurring after July 1, 2020.
For accidents occurring after July 1, 2020, motorcyclists are no longer automatically entitled to unlimited benefits. Due to the Order of Priority changes that went into effect on June 11, 2019, motorcyclists may be bound by the coverage levels chosen by the insurer of the owner or registrant of the motor vehicle involved.
Utilization review (UR) is also supposed be available for all treatment, products, services or accommodations rendered after July 1, 2020. DIFS has been charged with promulgating the rules to establish criteria or standards for UR, as well as, providing procedures related to UR. Based upon the public hearing that occurred on April 10, 2020, it sounds as though the UR start date may be pushed back.
So while we adjust to the “new normal” you won’t need to stock up on personal protective equipment, hoard toilet paper or bathe in hand sanitizer; but you are going to have to make sure that your thinking cap is strapped on tight. A few key things to be aware of are as follows:
As our world changes and adapts to a new way of living, remember that you are not alone in the journey and feel free to reach out to our expert counselors here at Garan Lucow Miller for any assistance you may need.
Check out our News & Events page to see what’s happening at GLM and find out about our upcoming seminars.
Sarah Nadeau, Editor of The Garan Report Publication, is a Shareholder in our Detroit Office. Sarah can be reached at 313.446.1530 or firstname.lastname@example.org