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If you are operating on a tight monthly budget, you may be considering a coordinated insurance policy to meet your mandatory no-fault requirements. But you need to know how a coordinated policy works, and when it doesn’t before you sign up.
What is a Coordinated Insurance Policy?
A coordinated insurance policy is a contract between you and your auto insurer that you will turn to your medical insurance first to cover expenses after an auto accident. You are still entitled to PIP benefits, but only after your health insurance has declined coverage.
PIP Applies to What Health Insurance Doesn’t Cover
Very few people have medical insurance that covers 100% of medical expenses the way Michigan’s no-fault insurance does. Modern health insurance policies are full of deductibles, copays, and coinsurance costs that you and your family are expected to cover out-of-pocket. In a coordinated insurance policy, your PIP benefits fill those gaps, paying for any part of your medical bills that your health insurance doesn’t.
Health insurance providers also limit where you can receive treatment. If a specialist or facility is “out of network” you may not be able to entitled to health insurance benefits. But Michigan’s no-fault law doesn’t allow for those kinds of exclusions. So even if a doctor is out of network, your PIP benefits will still cover the reasonably necessary medical costs.
Medicare / ERISA Plans Don’t Coordinate
Before you sign up for a coordinated insurance policy, make sure your health insurance qualifies. State-provided health insurance like Medicare or ERISA plans cannot be coordinated under federal law. If you are in an accident and have an improperly coordinated policy, your auto insurance company will likely be required to pay the bill. But you can expect that it will fight the case in court.
A Coordinated Insurance Policy Can Slow Down Payment
If you maintain a coordinated insurance policy, your medical providers will have to submit two insurance claims, instead of one. They must seek payment from your health insurance first, before submitting the bill for PIP benefits. This two-step process can slow down payment and draw out your claims process.
Any time there is an auto accident and a coordinated insurance policy, it is a good idea to get an experienced auto accident attorney involved right away. The attorneys at Christensen Law can help you identify the right insurance providers and file the right claims properly and on time. If you have been in a car crash, contact Christensen Law today for a free consultation.
