Lawmaker sponsors plan to scrap state’s no-fault law

State Rep. Aaron Miller today joined House colleagues in unveiling wide-ranging legislation repealing Michigan’s no-fault car insurance system. The measures aim at bringing significant relief to drivers paying the most expensive car insurance premiums in the nation.

The eight-bill package eliminates the no-fault system and moves Michigan to a full tort system similar to other states such as Indiana.

“We keep hearing the same talking point from the governor about how fixing the roads will save drivers roughly $600 a year in car repairs, yet drivers across our state are paying on average above $1,000 more for car insurance than the rest of the country – especially Indiana,” said Miller, of Sturgis. “Our broken no-fault car insurance system is holding hard-working Michigan drivers’ pocketbooks hostage. When you have a system where over 20 percent of motorists are driving illegally and the other 80 percent are on the brink of doing the same – it’s broken. We need to adopt what 38 other states are doing, which will make rates affordable for every Michigan family and ultimately stimulate the state’s economic growth.”

The plan continues the mandate that all Michigan drivers have insurance, but provides more choice and flexibility by eliminating the mandate to buy unlimited medical coverage. Accident victims will have the ability to sue at-fault drivers for economic damages and non-economic damages such as pain and suffering.

Colorado abandoned its no-fault system in 2003. According to a 2008 governor’s study, the average car insurance premium in the state decreased 35 percent since the state moved to a tort auto insurance system. Michigan drivers could see greater savings by parting ways with its no-fault system, which is the only one in the nation mandating unlimited medical coverage.

The bill package, House Bills 4397-4404, has been referred to the House Insurance Committee.

“It’s been over 40 years with a lot of talk and no action – and it’s high time that changed,” Miller said.