By David Mrozek
Ever wondered what PIP is and what your health insurance has to do with it?
PIP is the acronym for Personal Injury Protection, part of the Michigan No-Fault Law. This is the coverage that pays your medical and work loss benefits if you're injured in an auto accident. Michigan in the only state that provides for UNLIMITED LIFETIME COVERAGE for this.
In the past, your health insurance company would cover you from dollar one and the auto insurance company would pay whatever the health insurance company didn't. Because your auto insurance company only paid the excess, you got a big discount on your auto insurance policy. You may have seen it on your policy and "Excess", or "Coordinated Benefits".
In recent years, many health insurance companies have changed the way they treat auto accidents. They began changing their policies to cover an auto accident only AFTER the auto insurance company. They did this to save money on the claims side. So now, your auto insurance company has to pay from dollar one and, since the no-fault law provides unlimited coverage, your health insurance company doesn't have to pay a penny.
So, what does this mean to you and your rates?
Since the auto insurance company now has the expense of covering you from dollar one, you no longer get the big discount off your premiums. You'll see this on your policy as "Primary" coverage.
Is there any way around this? Nope. The best thing you can do is to be aware and to ask questions.
Your health insurance company didn't send you notifications of this change and it's extremely difficult to find within their policy documents. It comes down to this: ask your health carrier how they cover an auto accident, whether they are primary or not.
Next, talk with your insurance agent for your auto insurance. How is your policy written? Are they primary or excess? Make sure you get this right. If you're policy is written as excess or coordinated and your health insurance company doesn't pay primary, you're asking for trouble that's not worth the discount you're receiving. Both companies will take the stand that the other pays first so neither will want to pay those bills. You'll spend weeks and months trying to get them to pay it and your credit may be affected by late notices and collections.
The best way to do this is to have a professional insurance agent who understands how it all works together and can explain it to you. If it costs a little more, it's worth it. If you make your insurance purchasing decisions based on cost alone, you'll end up paying a lot more in the long run.
Be smart. Find a professional agent who cares more about you that just his commission and be open and honest with him/her. By knowing more about you and your particular circumstances, they can educate you and make good recommendations for how best to cover your risk.
This is not a sales pitch. This applies to any company and any agent. Find a professional, someone you can trust. Be honest and answer all their questions. We can't do our job correctly without all the information.
I've been doing this for over 17 years and I've seen a lot. I've stood outside a burning home at 2am with a client who just lost everything. They didn't have to ask me to come and they didn't have to worry about what was going to happen next.
Yes, you can call Flo or the lizard. You may even save a few dollars. Will they show up at your home when you need them? This is a relationship business. I care about each and every one of my clients. Find an agent that cares.
Article Source: http://EzineArticles.com/?expert=David_Mrozek
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