A bipartisan car insurance reform supported by Rep. Pamela Hornberger was signed into state law on Thursday, lowering costs for all Michigan drivers.
The reforms – approved by Hornberger 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 Michigan families will save hundreds of dollars or more each year.
Michigan has had the most expensive car insurance in the nation mostly because it’s 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 revised law will provide more affordable options for motorists while allowing those who currently use the unlimited coverage to keep it and those who want it in the future to continue buying it.
“It’s about time this historic reform for car insurance has been signed into law,” said Hornberger, of Chesterfield Township. “Macomb County drivers will no longer have to continue to pay into a broken system. This solution guarantees lower rates for all Michigan drivers and gives them more options to purchase an affordable plan for them and their families.”
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:
· 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, which should help further lower car insurance rates.
· A fee schedule will be established and phased in over three years for medical providers, reining in runaway costs that result from medical care providers charging far more to treat car accident victims than other patients.