Last Updated on July 27, 2025 by The Insurance Pros

Michigan PIP Insurance Options & Savings Explained


Michigan’s 2020 auto reform gave drivers more flexibility with their Personal Injury Protection (PIP) coverage. Now in 2025, many drivers are still unsure which option offers the best protection and savings. If you’re renewing your policy or shopping around, it’s essential to understand your choices.

📝 Michigan’s 6 PIP Coverage Choices

  1. Unlimited Coverage: Full PIP protection. MCCA pays after $600,000 (2025 limit).
  2. $500,000 Limit: Moderate medical coverage with lower premiums.
  3. $250,000 Limit: Common for most drivers who want cost savings.
  4. $250,000 coverage with exclusions is available for individuals who have qualified health insurance. You can exclude yourself and household members if all have qualifying plans.
  5. $50,000 Limit: Only for Medicaid-eligible individuals.
  6. Opt-Out: Available only if the named insured has Medicare Parts A & B and all household members are also covered by qualified insurance.

💸 Updated PIP Premium Savings (Post-Reform)

Originally, insurers were required to reduce premiums for eight years. However, many companies have adjusted their discounts based on claims experience and inflation. Current average savings (2025 estimates):

    • Unlimited PIP: ~10–12% savings
    • $500,000 PIP: ~18–22% savings
    • $250,000 PIP: ~30–35% savings
    • $50,000 PIP: ~40–45% savings
    • Opt-Out: Up to 100% off the PIP medical portion of the premium
Reminder: If you opt out or choose a lower limit, you could be personally responsible for large medical bills after a serious accident.

🚑 What Does PIP Cover in Michigan?

  • All necessary medical and rehabilitation costs
  • 85% of lost wages (up to $6,615/month in 2025, for up to 3 years)
  • Household replacement services ($20/day for up to 3 years)
  • Survivor benefits in the event of a fatal accident

🤕 What Happens If You Don’t Have PIP?

If you’re in an accident and your PIP coverage runs out or you opted out, you may have to:

  1. Sue the at-fault driver for excess medical expenses
  2. Use your health insurance (if it covers auto-related injuries)
  3. Apply for Medicaid or Medicare assistance
  4. File under underinsured/uninsured motorist coverage
  5. Pay medical bills out of pocket, potentially resulting in financial hardship or bankruptcy

📊 Which Option Is Best?

There’s no one-size-fits-all. If you don’t have adequate health insurance or have dependents, the unlimited or $500,000 coverage options may be safer. For individuals on Medicare, the opt-out option could be a sensible choice; however, it is advisable to consult with your agent beforehand.

For full details, visit the Michigan Department of Insurance and Financial Services (DIFS).

🚘 Get a Free Michigan Auto Insurance Quote

Finally, additional information regarding the new fee from the Michigan Catastrophic Claims Association can be found at MCCA New Fee.