What is a deductible?
A deductible is the out-of-pocket money you pay for a claim/loss. Deductibles can vary by coverage or policy. To help select your specific deductible(s), we recommend you contact an Independent Insurance Agent.
What is an insurance score?
An insurance score is a numerical value representative of a consumer’s credit profile relative to insurance risk. These scores predict the likelihood of an insured having a loss and filing a claim. We use insurance scores to understand an insured’s risk. It is one of the factors used to calculate premium. We are required to file how we use insurance scores with state regulators. The state regulator reviews each model to ensure it is compliant with state law.
What is “No-Fault Auto Insurance?"
In most states, if there is an auto accident the at-fault driver's insurance company pays for allinjuries and physical damage stemming from that accident. Michigan’s auto law is different than other states and requires that each insurance company pay for its own policyholders’ injuries and/or physical damage regardless of fault.
What is Market Value?
Market Value is the amount you could sell your home for.
What is Replacement Cost?
Replacement Cost is the cost to rebuild your home.
What is Personal Injury Protection (PIP)?
Your insurance policy covers you and any resident relatives (regardless of fault) based on your PIP coverage. A resident relative is defined as a person related to you by blood, marriage, or adoption who lives in your household.
Your PIP coverage is broken up into three categories: Medical Expenses, Work Loss, and Replacement Services.
Medical Expenses (PIP Medical): Your policy will pay up to your PIP Medical policy limits for claims covering medical expenses for the care, recovery, or rehabilitation of you, your spouse, and any resident relatives injured in an accident. Charges incurred for any products, services, and accommodations must be reasonable and necessary. Reasonable funeral and burial expenses are also covered, but have a separate limit indicated in your policy.
Work Loss: If you or any resident relatives are injured in an auto accident, your policy will pay for loss of income due to an auto accident up to 85% of the current salary for a maximum of three years (your policy sets a maximum per month limit as well).
Replacement Services: If an auto accident causes an inability to complete certain tasks such as lawn/garden maintenance, housekeeping, childcare, and more, your policy will pay up to $20 per day for up to three years.
You have the following options for your PIP Medical limit:
- Option 1 - Unlimited (this is still an available option but at a reduced price)
- Option 2 - $500,000
- Option 3 - $250,000
- Option 4* - $250,000 excluding all or some person(s) from PIP Medical
- Option 5* - $50,000 (Medicaid option)
- Option 6* - Medicare Opt Out
Selecting your PIP Medical limit option involves signing a form which explains the risks and benefits of each option. This form must be completed before a policy is issued and for each renewal (every year or 6 months depending on your policy term).
*Options 4, 5, and 6 have the following additional requirements in order for you to qualify to select them:
Option 4 - $250,000 excluding all or some person(s) from PIP Medical
Applicant/Named Insured: To be excluded, they must have health coverage that does not exclude or limit coverage for injuries related to motor vehicle accidents and the annual deductible must be $6,000 or less. This coverage cannot be Medicare.
Applicant/Named Insured’s spouse and any relative of either who resides in the same household must have Qualified Health Coverage, which can include Medicare.
Option 5 - $50,000
Applicant/Named Insured: Must be enrolled in Medicaid.
Applicant/Named Insured’s spouse and any relative of either who resides in the same household: Must be enrolled in Medicaid or have Qualified Health Coverage or be covered under another auto policy with PIP Medical coverage.
Option 6 – Medicare Opt-Out
Applicant/Named Insured: Must be enrolled in Medicare Parts A & B.
Applicant/Named Insured’s spouse and any relative of either that resides in the same household: Must have Qualified Health Coverage, which can include Medicare, or be covered under another auto policy with PIP Medical Coverage.
Qualified Health Coverage is defined as either of the following:
1. Other health or accident coverage to which both of the following apply:
- The coverage does not exclude or limit coverage for injuries related to motor vehicle accidents AND
- Any annual deductible for the coverage is $6,000 or less per individual (this amount may be adjusted annually by the Director of the Department of Insurance and Financial Services)
2. Coverage under Parts A and B of the Federal Medicare Program
As you can see, the options for Personal Injury Protection (PIP) can be somewhat complicated. Your Independent Agent is your best resource for help with understanding your options.