Long-overdue auto insurance reform supported by Rep. Ryan Berman was signed into state law today, guaranteeing lower rates for drivers in Oakland County and across Michigan.

The bipartisan reforms – approved earlier by Berman and the Legislature – give drivers more choice on personal injury protection (PIP) coverage, combat fraudulent claims and take steps to rein in medical costs. Berman said depending on the PIP coverage level chosen, motorists could see hundreds of dollars or more in cost savings each year.

“During the last five months I’ve heard from countless people about the need to reform our state’s no-fault system,” said Berman, of Commerce Township. “This bipartisan plan guarantees rate reductions for all Michigan drivers and reduces medical costs for auto accident victims.”

Michigan has had the most expensive auto insurance in the nation mainly because it was the only state mandating unlimited lifetime health care coverage through car insurance, without any cost containment. The new law will provide drivers more affordable options while allowing those who currently use the unlimited coverage to keep it, and those who want it in the future to continue buying it.

Starting 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 auto 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 auto accident victims than other patients.
• Non-driving factors, such as ZIP codes, home ownership, and educational level, cannot be used to determine rates.
• An anti-fraud unit will help crack down on those abusing the system, helping further lower auto insurance rates.