Historic overhaul will save drivers hundreds of dollars per year

Car insurance reform supported by Rep. Julie Alexander was signed into state law today, guaranteeing significantly lower costs for all drivers in Michigan.

The bipartisan reforms – approved by Alexander and the Legislature – give drivers more choice on personal injury protection coverage, combat fraudulent claims and stop price gouging on medical services for car accident victims. Many motorists, including Jackson-area families, will save hundreds of dollars or more each year.

Michigan has had the most expensive car insurance in the nation mainly because it was the only state mandating unlimited lifetime health care coverage through car insurance, with no corresponding cap on what medical providers may charge accident victims. The new law will provide more affordable options for drivers while allowing those who currently use the unlimited coverage to keep it, and those who want it in the future to continue buying it.

“The people of Michigan aren’t interested in talk, they’re interested in results,” said Alexander, of Hanover. “The signing of this historic no-fault overhaul is exactly what the people have been demanding from their elected officials for over 40 years. I commend the governor for her willingness to work with the Legislature on the largest financial issue facing drivers on Michigan roads and joining us in delivering real cost savings to every motorist across the state.”

Beginning in July 2020, many drivers will be able to opt out of personal injury protection altogether, including seniors with retiree health coverage such as Medicare and those with health insurance policies that cover car accident-related injuries. Others will be able to continue with unlimited coverage or choose PIP limits of $250,000 or $500,000. A $50,000 option will be available for drivers on Medicaid.

Other reforms include:

• A fee schedule to rein in runaway costs that result from medical care providers charging far more to treat car accident victims than other patients.
• Non-driving factors, such as ZIP codes, home ownership and educational level, can’t be used to determine rates.
• An anti-fraud unit will help crack down on those abusing the system, helping to further lower car insurance rates.