Changes in no-fault system will save drivers hundreds of dollars per year

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

The bipartisan reforms – approved by Kahle and the Legislature after weeks of thorough deliberation – give drivers more choice on personal injury protection coverage, combat fraudulent claims and stop price gouging on medical services for car accident victims. Many Michiganders, including Lenawee County families, will save hundreds of dollars or more each year.

Michigan has had the most expensive car insurance in the nation mainly 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.

“Be it office hours, door-to-door visits, letters and phone calls or at the grocery store, I have heard drivers’ concerns about the excessive cost of car insurance,” said Kahle, of Adrian. “I’ve listened and am pleased to say we got long-overdue no-fault reforms across the finish line. Friends, families and neighbors in Lenawee County and across the state will finally see the rate relief they have demanded and deserve. There will be one less burdensome, hidden tax squandering the money of hard-working Michigan families and vulnerable seniors on fixed incomes.”

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.