GRAND RAPIDS, Mich. (WOOD) — This week, drivers in Michigan will begin having options for Personal Injury Protection (PIP) coverage on auto insurance policies.

The state’s new auto insurance law, approved last year, takes effect July 2. One of the biggest impacts on drivers is a tiered approach to PIP rather than everyone carrying unlimited coverage.

Beginning Thursday, drivers will have the following options:

  • Maintain unlimited coverage
  • Insurance companies will cover up to $500,000
  • Insurance companies will cover up to $250,000
  • Insurance companies will cover up to $50,000 — only available to people on Medicaid
  • Opt out entirely — only available to people qualified through health insurance or on Medicare Parts A and B

News 8 spoke to Brian Boer of BOER Insurance Group about the new law.

“The big benefit that’s going to be incorporated for all of us in Michigan is the fact that the catastrophic claims association fee (MCCA) has been reduced by about $100 per vehicle,” Boer explained. “So, drivers who choose to keep that coverage they’ve had in the past, they still will see that fee that the state charges on every vehicle reduced by $100 each year.”

So, what happens if you choose a lower coverage limit and get into an accident that results in medical bills beyond that amount?

“The short answer is they become your responsibility,” Boer explained. “If you choose a coverage amount and your insurance policy has paid that amount of coverage, they no longer are on the hook for any of those lingering expenses. So those become your responsibility personally.”

Another impact the change is anticipated to have will be on lawsuits related to crashes. At-fault drivers will be on the hook for medical expenses.

“That’s one of those trickle-down effects we’ve been talking about where all of our liability coverage is watered down a bit in terms of how effective it is as of July 2 because there will be drivers on the road who have chosen less coverage for themselves,” Boer said. “If I, God forbid, injure one of those drivers, they’re going to have a larger lawsuit against me because they don’t have unlimited lifetime coverage for their injuries. They’re going to be looking to me as the at-fault driver, through a lawsuit, to try to recover those out-of-pocket expenses.”