State department, insurance industry accelerating toward July 1 rollout
State Rep. Beau LaFave, of Iron Mountain, today announced the first wave of rates approved by state regulators under terms of Michigan’s new no-fault car insurance law indicate substantial savings are in store for Upper Peninsula drivers.
“As the state continues to prepare for the July 1 rollout of the new no-fault car insurance law, we’re starting to see a trend that shows big savings are in the forecast for Michigan drivers,” said LaFave, who serves on the House Select Committee on Reducing Car Insurance Rates. “Of the first few insurance providers to have their rates approved by the state, all of the policies they wish to sell exceed the guaranteed savings required by the new law.”
Of the rates filed to the Michigan Department of Insurance and Financial Services (DIFS), six have been approved, representing a quarter of the state’s car insurance market. The aggregated data on the approved rates show – on average – statewide personal injury protection (PIP) savings exceed the mandatory savings outlined under Michigan’s new no-fault law that’s set to take effect July 1, 2020.
“Despite the ongoing coronavirus outbreak in Michigan, the department has assured the Legislature it would work around the clock to conduct rigorous reviews of all proposed rates in-state insurance providers file,” LaFave said. “While six providers have had their proposed rates approved, I expect many more to be approved in the coming weeks that follow a similar pattern of savings.”
Below is a comparison of the PIP rate rollbacks mandated by state law compared to the average savings approved by DIFS:
• Unlimited PIP coverage – 10 percent savings mandated by state law, 16.5 percent average savings approved by DIFS.
• $500,000 in PIP coverage – 20 percent savings mandated by state law, 36.3 percent average savings approved by DIFS.
• $250,000 in PIP coverage – 35 percent savings mandated by state law, 41.9 percent average savings approved by DIFS.
• $50,000 in PIP coverage – 45 percent savings mandated by state law, 54.3 percent average savings approved by DIFS.
• Michigan drivers who opt out of PIP coverage will see up to a 100 percent savings in that portion of their policies.
“This is a major overhaul of the existing no-fault car insurance system,” LaFave said. “Just because you are with a provider that is offering you the lowest possible rate now doesn’t mean that same provider will have the lowest rates come July. I encourage drivers to take this time to start familiarizing themselves with the reforms and consult with their agents on an insurance plan that will work best for their household budgets.”
Reliable information regarding Michigan’s new no-fault car insurance law that takes effect July 1 is available by visiting www.Michigan.gov/AutoInsurance. Rep. LaFave and his staff are working remotely so they can continue to serve residents during the COVID-19 outbreak. People with questions or concerns can reach his office by calling (517) 373-0156 or emailing BeauLaFave@house.mi.gov.