How We Educate Our Insurance Clients

John Avery

Why An Insurance Advocate Matters

I would like to share a story that illustrates how we educate our clients so they can make the best choice for their situation. This story details the PIP (Personal Injury Protection) medical benefits available within the State of MI auto policy.

The State of Michigan went through a major auto insurance reform in 2020. There were three major pieces to the reform:

1. A Fraud Authority was created to address the 400M per year in auto insurance fraud in Michigan.

1. Medical Fee Schedule: Prior to the fee schedule, auto insurers were paying up to 4 times the amount a health insurer paid for the same medical services, which lead to higher insurance premiums.

1. PIP choices: The 2020 Auto Reform allowed one to choose the desired level of PIP coverage including opting out.

Professionally speaking, I think the first two options addressed the two major issues with the prior law and if properly implemented, could have allowed the State of MI to keep the unlimited medical benefits as part of the law and be a model for the rest of the country. 

Focusing on the PIP choices, I often have clients say they have health insurance and don’t need medical coverage through the auto policy. Of course, we hope one never needs this coverage. We share the following real world claim story to illustrate the important benefits provided by the PIP medical benefits within the auto policy:

I received a frantic call from the wife – her husband was on his way to work at Ford when a vehicle crossed the centerline and hit him head on. He was lucky to be alive. He was immobile for many months. He has great health insurance through Ford. However, the health insurance did not pay to have someone come to the house every day to help take care of him, but the unlimited PIP benefits in the auto insurance did provide the attendant care coverage. He has excellent disability coverage through Ford, but quickly realized that 65% was not enough to live on. However, the auto insurance provides a work-loss benefit not provided by his employer. He is going through extensive rehabilitation and needed ramps and railings installed at the home. His excellent health insurance did not provide coverage for this, but the unlimited PIP benefits from his auto policy did pay for the home modifications.

As previously stated, we wish no one ever needed this coverage. However, as this story illustrates, when a major auto accident does happen, the benefits available through the auto policy can protect a family from financial catastrophe.

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