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July 2020 Newsletter

July 7, 2020

Dear Clients and Friends,

NEW AUTO INSURANCE LAW

Long overdue changes have been made to the Michigan Auto Insurance law effective July 1, 2020. Michigan has experienced the highest auto rates in the U.S. due primarily to unlimited coverage for medical expenses incurred in an automobile accident.

Personal Injury Protection (PIP) Liability Coverage

You now have the option of reducing this coverage and thereby reducing your premiums for PIP by from 10% to 45%. PIP is medical coverage to pay for your expenses if injured in an automobile accident for medical care, recovery, rehab, and funeral expenses. It is redundant to your health insurance or Medicare insurance.

Your new PIP choices are:

  • Continue unlimited coverage

  • Up to $500,000 in coverage

  • $250,000 in coverage

  • Up to $25,000 in coverage with the medical exclusion

  • Up to $50,000 in coverage

  • PIP opt-out (rely on health insurance)

Bodily Injury (BI) Liability Coverage

Bodily injury insurance covers claims made against you for injuries to others if you are at fault in an auto accident.

The new default limits are $250,000 per person and $500,000 per accident. This is an increase over the previous default limits. If you do nothing, your premium will be based on this coverage. You may select lower limits down to $50,000 per person and $100,000 per accident.

If you do nothing, your BI will increase to the new difficult level of $250,000/$500,000 and you will continue with unlimited PIP. The result may be an increase in your premiums.

You may choose lower levels of coverage for PIP and BI which will reduce your premiums.

Here is what I suggest as a process to make a decision.

  • Background: The following websites will provide additional information.

    • Michigan.gov/autoinsurance

    • Mlive.com/public-interest/2020/06/Michigan-auto-insurance-law or, Google “Michigan auto insurance changes” to find more information.

  • Talk to your Healthcare insurance agent. Are you covered by health insurance or Medicare and a Medigap policy? Do the policies cover injuries from auto accidents? What are the limitations? For example, Medicare will only cover up to 100 days of hospitalization and rehab. You need to understand where your medical coverage will come from if you reduce your PIP coverage.

  • Contact your auto insurance agent to discuss coverage changes. The agents have all gone thru training to assist you. However, they will not generally be contacting you to discuss changes or will contact you only when your policy renews.

If you do nothing, your rates will probably stay the same or go up.

Finally, a plea. Please do not call our office about this issue. I do not have the information that your healthcare agent and auto agent have and that is needed to make a decision for you. They have all received special training to be able to help you. My goal was to bring this important issue to your attention.

SEMINARS

All of the senior centers and libraries that had previously scheduled seminars this year have requested that we resume the seminar schedule in August. Here is the current schedule:

2020 NORTHVILLE SEMINARS

All seminars will be at 10:30 am

Northville Community Center: 303 W. Main St. Northville, MI 48167

Please call (248) 305-2851 to reserve a seat

July 21

What You Need to Know about LTC and Medicaid

August 18

Wills, Trusts, and Ladybird Deeds

September 15

What you need to know about 401ks, IRAs

October 20

Wills, Trusts, and Ladybird Deeds

November 17

New Laws Affecting your Estate Plan

December 15

What You Need to Know about LTC and Medicaid

2020 PLYMOUTH SEMINARS

All seminars will be at 1:30 pm

Plymouth Friendship Station: 42375 Schoolcraft Plymouth, MI 48170

Please call (734)354-3222 to reserve a seat!

August 27

Wills, Trusts, and Ladybird Deeds

September 24

What you need to know about 401ks, IRAs

October 22

New Laws Affecting your Estate Plan

November 12

Wills, Trusts, and Ladybird Deeds

2020 WESTLAND SEMINARS

All seminars will be at 1:00 pm except September 18 at 10:00 am

Westland Friendship Center: 1119 N. Newburgh, Westland, MI 48185

Please call (734)722-7632 to reserve a seat

August 20

New Laws Affecting your Estate Plan

September 18

Wills, Trusts, and Ladybird Deeds

October 15

What You Need to Know about LTC and Medicaid

November 19

Wills, Trusts, and Ladybird Deeds

2020 RMD

New legislation has stated that your required minimum distribution for 2020 is NOT required. You may take the RMD and pay tax in it. However, if you do not want to take the RMD, you may skip taking it this year. If you have already taken it, you may return it to your IRA custodian and you will not have to pay tax on that distribution. Contact your financial planner or IRA custodian for further details.

REVIEWS

I again encourage you to contact our office for a free review of your estate plan. Laws have changed or perhaps your family has changed. Marriages, divorces, births, and deaths all impact an estate plan. Perhaps you need new people on your powers of attorney. We are happy to discuss your existing plan, either in person or over the phone.

Very truly yours,

Gary