Historic no-fault car insurance reforms signed to law

A bipartisan car insurance reform solution supported by Rep. Eric Leutheuser was signed into state law today, guaranteeing lower costs for all Michigan drivers.

The reforms – overwhelmingly approved by Leutheuser and the Michigan Legislature – give drivers more choice on personal injury protection coverage, combat fraudulent claims and stop price gouging on medical services for car accident victims. Every Michigan family will save money on the personal injury protection portion of their policies, resulting in hundreds of dollars or more in savings each year.

“Finally, after enduring the state’s broken no-fault system for over 40 years, Michiganders are getting a break,” said Leutheuser, of Hillsdale. “Drivers will be able to choose coverage options that best meet their financial needs, allowing them to keep more of their hard-earned money. Seniors will have dramatic relief. Families will be free from an onerous requirement that caused the highest car insurance premiums in the country.”

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.

Beginning in July 2020, many drivers will be able to opt out of personal injury protection (PIP) altogether, including seniors with retiree health coverage such as Medicare and anyone 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 reign in runaway costs that result from health providers charging far more to treat car accident victims than other patients.
• An anti-fraud unit to help crack down on those abusing the system, helping further lower car insurance rates.
• Non-driving factors, such as zip codes, home ownership and educational level, cannot be used to determine rates.

“Reducing the cost of car insurance was my top priority from listening to Branch and Hillsdale County drivers, and I cannot wait to see the positive impact this new law generates in family budgets and our economy,” Leutheuser said. “Michigan residents are some of the hardest-working people I know – they don’t want handouts, they just want to compete on a level playing field with the rest of the country. By expanding their options, Michiganders will better be able to make ends meet, drive to good-paying jobs, and raise a family in our home state.”