Historic car insurance reform supported by Rep. Sarah Lightner was signed into state law today, lowering costs for all Michigan drivers once the law is officially enacted.
The reforms – approved by the Legislature and signed by the governor – give drivers options on personal injury protection coverage, combat fraudulent claims and stop price gouging on medical services for car accident victims. Once enacted, many Michigan families will see significant savings each year as a result.
Michigan has had the most expensive car insurance in the nation largely due to the mandated 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, as well as those who want it in the future to continue buying it.
“I have heard many concerns from people about reducing car insurance rates, and this solution will help bring down the extraordinarily high cost to drive in Michigan,” said Lightner, of Springport. “This long overdue reform will guarantee savings for Michigan drivers, finally delivering the rate relief they deserve.”
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:
· Eliminating non-driving factors in rate setting, such as ZIP codes, home ownership and educational level.
· Establishing an anti-fraud unit that will help crack down on those abusing the system.
· Implementing a fee schedule, 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.
· Transparency and accountability within the Michigan Catastrophic Claims Association Fund, providing that drivers see rebates if the fund is seeing large surpluses.