With all that has happened over the past year-and-a-half, auto insurance reform may have gone unnoticed for some.

Recent events have also reminded many that this is not a perfect world, and that accidents sometimes turn into tragedies if the proper protective measures are overlooked.

In July 2020, the state changed some of its insurance requirements that had been in place since 1973. The main change that took place involved personal injury protection, a coverage that we all had to maintain at an unlimited amount, no matter your financial or current health insurance situation.

That did provide us some great benefits, at least at first. It made it much more difficult to sue each other for injuries in an auto accident, simply because, if all of our injuries are covered at an unlimited amount, no matter who is at fault, there is little financial impact on either party.

That “fix” did bring some long-term pain in the form of higher premiums for policyholders in Michigan.

Since we all share in the cost of all of the claims, as the number of those personal injury protection claims snowballed, so did all of our premiums. So much so that, in 2019, before the law changed, nearly 30% of Michigan drivers didn’t have any auto insurance at all, mainly because of the high cost.

A law that originally intended to protect all drivers was forcing many into a situation with no coverage whatsoever.

Let’s pause here and recognize that the old “no- fault insurance” really benefited us in two ways: First, it protected us from our own injury cost, and, second, it prevented the need to sue each other.

So, with this law being changed dramatically, those are the main items we need to be conscious of: What is the right personal injury protection option for my own situation, and how do I protect myself if someone sues me for their injuries?

With every household’s situation being unique, it is important to consult with a licensed insurance agent about your specific needs. The personal injury protection option you choose is dependent on your health insurance and documentation may be required by your insurer. There are six new options, ranging from unlimited coverage to no personal injury protection medical coverage whatsoever.

One important thing to note: The decision affects you and every resident relative in your household, whether they are a driver or not. So it is important to discuss each resident relatives’ health insurance with your insurance agent to ensure that you are all covered correctly. If the wrong choice is made, it could result in significant out-of-pocket cost for injuries.

Another main benefit of making the correct selection is to save on your auto insurance premiums.

With the new options, decisions other drivers are making about PIP can have an impact on how/how much we can be sued if found at fault. Once again, the exact amount of liability coverage each person needs varies on their assets and ability to earn income.

It is important to consult with a professional.

Let’s point out that, not only did the minimum bodily injury liability limits increase with the law change, but forms are required to be signed if you want bodily injury limits less than $250,000 per person and up to $500,000 per accident.

Let that be a testament to the need for increased awareness around our specific liability need.

To conclude, there are many intricacies to the law change that require your attention with help from a licensed insurance agent.

Some areas of the new laws allow for substantial savings on premiums.

At the same time, those same areas, if not chosen from correctly, could result in significant out-of-pocket cost.

That directly impacts our liability risk, because of that potential out-of-pocket cost you may cause someone else to experience. Make the right choices to protect your assets and income, for both yourself and your family.

Your future and the future of your family and estate beneficiaries will benefit from your vision and planning.

Sam Rumbles is a licensed insurance agent with State Farm Insurance in Alpena. He currently serves as a member of the MidMichigan Health Foundation’s Planned Gifts Committee.