Car insurance reform supported by Rep. Pauline Wendzel was signed into law today, lowering costs for all Michigan drivers.
The reforms – approved by Wendzel and the Legislature – give drivers more choice on personal injury protection coverage, combat fraudulent claims and stop price gouging on medical services for car accident victims. Many Michigan families will save hundreds of dollars or more each year.
Michigan has had the most expensive car insurance in the nation mostly because it’s the only state mandating unlimited lifetime health care coverage through car insurance. The revised 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.
“This bipartisan compromise delivers on a promise to fix no-fault and put an end to skyrocketing insurance rates,” said Wendzel, of Bainbridge Township. “These reforms are long overdue, and I am pleased to see Michigan drivers get the rate relief they deserve.”
Starting in July 2020, some 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. A $50,000 option will be available for drivers on Medicaid. Others will be able to continue with unlimited coverage or choose PIP limits of $250,000 or $500,000.
A fee schedule will be established for medical providers, reining 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 will not be used to determine rates. Residents in Southwest Michigan will no longer have to pay higher rates to subsidize drivers in other areas.
An anti-fraud unit will help crack down on those abusing the system, which should help further lower car insurance rates.