Michigan no-fault PIP choices: the options in the statute, who qualifies for each and what the default is

Michigan lets a policyholder choose how much personal protection insurance (PIP) medical coverage to buy: $50,000, $250,000, $500,000 or unlimited, under MCL 500.3107c. The $50,000 level is only for people on Medicaid. Around those four levels the law adds an opt-out for people with Medicare Parts A and B, an exclusion tied to qualifying health coverage that pairs with the $250,000 level, and a work-loss waiver at 60. If no valid choice is made, a presumption from the premium paid applies first and, failing that, the policy is treated as unlimited.

Sources disagree on how many options Michigan has, because they count differently: four limits, five with the opt-out, six with the health-coverage exclusion, seven with the work-loss waiver. The differences come from whether the exclusion and the waiver are treated as options or as add-ons, and the statute settles the count only by listing each in its own section. It also settles what happens when no choice was made: a presumption from the premium paid applies first and, failing that, unlimited coverage. The text below was read on the Michigan Legislature website, which reports the Michigan Compiled Laws complete through Public Act 114 of 2026; no Department of Insurance and Financial Services summary is used.

Estimates and published averages, not a quote. Not insurance advice. State rules and insurer rules vary. Confirm requirements with your state insurance regulator or a licensed agent in your state.

Counting the options from the statute

The table lists each choice with the section that creates it, who may take it and what it removes. A policy that provides the security required by section 3101(1) and is issued or renewed after July 1, 2020 must carry one of the first four coverage levels unless the opt-out applies, and the form must state the benefits and risks of each in a conspicuous manner.

Counted this way the answer to “how many options” is four limits, one opt-out, one exclusion and one waiver. The differences between counts come from whether the exclusion and the waiver are treated as options or as add-ons. None of the counts replaces reading the form you were given. Statutory wording also matters in one more place: the choices listed here concern PIP medical benefits. Work loss, replacement services and survivor’s loss follow in section 3107 and the rest of chapter 31, and the opt-out in 3107d, which is written for benefits payable under 3107(1)(a), does not by its words reach them; the work-loss waiver removes work loss for the person who signs, and the 3109a exclusion is discussed with the households below.

The default: what happens if no choice was made

The statute spells out three fall-backs, and they all lead to the top level. If the applicant or named insured has not made an effective selection under 3107c but a premium or installment has been paid, there is a rebuttable presumption that the amount of premium paid reflects the coverage level that applies to the policy (3107c(3)). If no effective selection was made and that presumption does not apply, section 3107c(4) applies subsection (1)(d), unlimited coverage. For the opt-out, section 3107d(4) says a policy without an effective election “is considered to provide personal protection benefits under section 3107c(1)(d)”, again unlimited.

What counts as an effective selection is also in the statute. Section 3107e requires a form under 3009, 3107c or 3107d to be delivered by personal delivery, first-class mail or electronic means, and a selection to be made by marking and signing a paper form, by giving verbal instructions that the form be marked and signed on the person’s behalf, or by marking it electronically with an electronic signature. A verbal selection is effective only if the instructions were recorded and the recording is kept by the person who received them. In a dispute over a verbal selection, the law presumes it was not effective, and the insurer must rebut that presumption with the recording.

That makes the first action simple for anyone unsure what they bought. Look for the signed or recorded form, or ask the insurer for it. If you cannot find evidence of a selection, the presumption from the premium paid and then the unlimited default are what the statute applies to the policy, which may differ from what the agent remembers. The Florida rules page describes a similar written-rejection structure for uninsured motorist coverage.

Whose benefits the choice sets

A choice does not apply to the named insured alone. Section 3107c(5) says the coverage level applies to the named insured, the named insured’s spouse, a relative of either domiciled in the same household, and any other person with a right to claim PIP benefits under the policy. The opt-out and the exclusion work the same way: a 3107d election applies to the named insured, the spouse, a domiciled relative and anyone else who would have had a right to claim, and a 3109a exclusion applies to persons subject to it.

Two further rules limit stacking and extend the choice to app drivers. When benefits are payable under two or more policies, they are payable only up to an aggregate limit equal to the highest available limit under any one of the policies (3107c(6)). A person covered by a $250,000 policy and a $500,000 policy is covered to $500,000, not $750,000. And a transportation network company, as defined in the Michigan limousine, taxicab and transportation network company act, may only select the $250,000, $500,000 or unlimited levels (3107c(7)).

Proving eligibility: Medicaid, Medicare and “qualified health coverage”

Three of the choices depend on proof about someone’s health coverage, and the proof is defined narrowly. Section 3107d(7)(b) defines qualified health coverage as either of two things. The first is other health or accident coverage that does not exclude or limit coverage for injuries related to motor vehicle accidents and whose annual deductible is $6,000 or less per individual. The director adjusts the $6,000 on July 1 each year by the percentage change in the medical component of the Consumer Price Index for the preceding calendar year, but does not make the adjustment unless the adjustment, or the total of the adjustment and earlier unadded adjustments, is $500 or more. The second is coverage under Parts A and B of Medicare.

A “qualified person” is a person with Medicare Parts A and B, and that is the only person who can opt out of PIP medical coverage. Everyone else in the household whom the election would cover must have qualified health coverage or PIP coverage from an insurer providing 3101(1) security. The named insured has to give the insurer a document from the person that provides the qualified health coverage stating the names of all persons covered (3107d(2)). The statute does not say what the $6,000 figure is today, so the current number is a question for the insurer.

If the health coverage ends while the policy is in force, the statute gives 30 days. Under 3107d(6)(a) the named insured must obtain insurance that includes PIP medical coverage within 30 days after the termination takes effect. An insurer may not refuse to insure, limit coverage, charge a reinstatement fee or raise premiums for an eligible person solely because the person previously failed to obtain the insurance in that time (3107d(6)(b)). An injury in the 30-day gap, if the person has no other coverage, is not payable by the policy but can be claimed through the assigned claims plan (3107d(6)(c)); section 3109a(2)(d) and (e) has the same structure for the exclusion. The statute leaves no room for a silent lapse of the health plan: the duty to act sits on the named insured.

Five assumed households, five different menus

The households below are invented for the example. The point of each is which options the statute makes available and what the person trades, not the premium, which the statute does not set.

Take Priya’s row as the warning. A plan can be called “major medical” and still fail the test, either because the deductible is above the statutory figure or because the plan excludes or limits coverage for motor vehicle injuries. Some employer plans pay secondary to auto coverage. Whether yours does is in the plan document, not on the insurance card, and the statute’s test is the plan’s terms, not the insurer’s assumption. Ask the plan administrator in writing whether it covers injuries from motor vehicle accidents without exclusion or limit, then keep the answer with the form.

Take Dana and Luis’s row as the other warning. The exclusion in 3109a(2) is not just a premium discount; subsection (2)(c) says a person subject to it “is not eligible for personal protection benefits under the insurance policy”. Read on its own, that sentence reaches every PIP benefit, including work loss and the replacement services allowance. Other parts of the same subsection point the narrower way: the 100 percent premium reduction in (2)(a) is for benefits payable under section 3107(1)(a), the allowable-expenses benefit, and (2)(e) also refers to 3107(1)(a). The statute does not say in terms which reading controls, so this page does not pick one. If one spouse is the household’s main earner and could not work for months, the difference matters. The question to put to the insurer, in writing, is whether an excluded person keeps any work-loss or replacement-services benefit under this policy, and what in the policy form says so.

What the limit covers: the benefits behind the number

The limit in 3107c caps the allowable expenses benefit in 3107(1)(a): reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person’s care, recovery or rehabilitation. It excludes charges for a hospital room above the reasonable and customary semiprivate rate unless special or intensive care is needed, and funeral and burial expenses above the amount stated in the policy, which must be between $1,750 and $5,000. The other PIP benefits sit outside that cap.

Work loss, under 3107(1)(b), is lost income from work the injured person would have performed during the first three years after the accident. Because PIP benefits are not taxable, the benefit is reduced 15 percent unless the claimant gives reasonable proof of a lower tax advantage, and the monthly maximum is adjusted annually for the cost of living under rules the director prescribes. Replacement services, under 3107(1)(c), pay up to $20 a day for ordinary and necessary services the injured person would have performed in the first three years, not for income but for the benefit of the person or dependents.

Prices for care are also regulated. Section 3157 caps what a provider can be paid by reference to Medicare: for treatment after July 1, 2023, 190 percent of the Medicare amount in general, 220 percent for certain providers serving high shares of indigent patients and freestanding rehabilitation facilities, and 230 percent for level I or level II trauma centers treating an emergency medical condition before the patient is stabilized. (Providers with 30 percent or more of their care in the indigent group are paid at 250 percent.) The effect is that a given limit buys fewer dollars of care than it would have before the schedule, and more than it would at Medicare rates.

What sits above the limit

Choosing a limit below unlimited does not leave the excess unpaid by law; it moves it into a lawsuit. Section 3135(3)(c) preserves tort liability for allowable expenses, work loss and survivor’s loss in excess of any limit under 3107c or the daily, monthly and three-year limits in those sections, and without limit for allowable expenses where the person elected not to maintain the coverage under 3107d or an exclusion under 3109a(2) applies. So a person who chose $250,000, or opted out, can claim the balance of medical costs from an at-fault driver.

That claim is only as good as the at-fault driver’s coverage and assets. Michigan’s liability floor, in section 3009, is $250,000 for one person and $500,000 for two or more, plus $10,000 for property damage. A driver can choose lower liability limits, but not lower than $50,000 and $100,000, by completing a director-issued form after being given the options and the price of each (3009(5) to (7)); without an effective choice, the $250,000 and $500,000 limits apply (3009(8)). A claim above PIP is worth least against a driver who chose the $50,000 and $100,000 minimums.

The lawsuit has conditions. A person remains subject to tort liability for noneconomic loss only if the injured person has suffered death, serious impairment of body function or permanent serious disfigurement (3135(1)). Damages are assessed on comparative fault, and a party more than 50 percent at fault recovers nothing; a party driving an uninsured vehicle cannot recover noneconomic damages (3135(2)). Damage to a vehicle not covered by insurance can be recovered from the at-fault driver up to $3,000 for accidents after July 1, 2020 (3135(3)(e)). The Florida rules page covers a different system with similar vocabulary: Florida car insurance rules.

The practical reading for a household choosing a limit: below unlimited, a catastrophic injury can run into the cap, and what happens next depends on three things the statute makes separate: the attendant care rider that 3107c(8) requires insurers to offer, the other driver’s liability limit, and the household’s own health coverage. Whether the premium difference between $250,000 and unlimited is worth carrying is a household decision the statute does not make and this page does not price.

Deadlines and the plan that catches the uninsured

Two procedures matter however you choose. The first is the one-year rule. Under 3145(1), an action for recovery of PIP benefits may not be commenced later than one year after the accident unless written notice of the injury, giving the claimant’s name and address and the time, place and nature of the injury, has been given to the insurer within one year or the insurer has already paid benefits for the injury. Once notice is given or a payment is made, an action may be started within one year after the most recent allowable expense, work loss or survivor’s loss was incurred, but the claimant may not recover benefits for any portion of the loss incurred more than one year before the action was commenced (3145(2)). The period is tolled from the date of a specific claim for payment until the insurer formally denies it, if the claimant pursues the claim with reasonable diligence (3145(3)). An action for property protection benefits must start within one year after the accident (3145(5)). The effect of the second sentence is the one to keep in mind: delay costs benefits that were incurred more than a year before the suit, even when the claim was timely noticed.

The second is the assigned claims plan. A person entitled to claim PIP because of accidental injury in a motor vehicle accident in Michigan may claim through the plan if no PIP applies to the injury, none can be identified, an insurer dispute leaves it undetermined, or the only identifiable coverage is inadequate because of an insurer’s financial inability (3172(1)). The person files an application with the Michigan automobile insurance placement facility, which, or the insurer assigned the claim, must specify the materials that constitute a reasonable proof of loss within 60 days of receiving a compliant application (3172(3)). Benefits through the plan are reduced to the extent that other sources cover the same loss (3172(5)). This is the safety net behind the 30-day rules above, and it is why a lapse in the health plan that supports an opt-out needs fixing quickly.

Michigan’s auto insurance system also has a property side, which the statute calls property protection insurance. It pays for accidental damage to tangible property arising out of the ownership, operation, maintenance or use of a motor vehicle, up to $1,000,000 under one policy for one accident (3121(5)), and the insurer pays benefits without regard to fault (3121(2)). That limit is not a choice in the way PIP is; it sits in the required security.

Questions readers ask

To see how Michigan’s structure compares with PIP and MedPay in seven other states, read the eight-state table in medical payments versus PIP.