Historic changes signed into Michigan law

Long-overdue car insurance reform supported by Rep. Greg Markkanen was signed into state law today, guaranteeing lower rates for drivers in the Upper Peninsula and across Michigan.

The bipartsian reforms – approved earlier by Markkanen and the Legislature – give drivers more choice on personal injury protection (PIP) coverage, combat fraudulent claims, and take steps to rein in medical costs. Markkanen said depending on the PIP coverage level chosen, motorists could see hundreds of dollars or more in cost savings each year.

Michigan has had the most expensive car insurance in the nation mainly because it was the only state mandating unlimited lifetime health care coverage through car insurance. The new law will provide more affordable options while allowing those who currently use the unlimited coverage to keep it, and those who want it in the future to continue buying it.

“I’m pleased to see our governor finally put in pen these historic changes to Michigan’s long-standing broken car insurance system,” said Markkenen, of Hancock. “The exorbitant cost of car insurance is by far the most common complaint I hear from Upper Peninsula drivers as I travel the district. I’ve listened to their concerns, and with bipartisan efforts, helped deliver a solution to make driving more affordable for families across Michigan.”

Starting 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:

• A fee schedule to rein in runaway costs that result from medical care providers charging far more to treat car accident victims than other patients.
• Non-driving factors, such as ZIP codes, home ownership, and educational level, cannot be used to determine rates.
• An anti-fraud unit will help crack down on those abusing the system, helping further lower car insurance rates.