New law to save Southeast Michigan drivers hundreds of dollars per year

Historic car insurance reform supported by state Reps. Joe Bellino and Jason Sheppard was signed into state law today, lowering costs for all Michigan drivers, including those in Monroe and Wayne counties.

The reforms – approved by Bellino, Sheppard 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, 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.

“Forged by hard work to hammer out bipartisan a compromise, these reforms are now law,” said Sheppard, of Temperance. “This is a huge win for Monroe County drivers and motorists across the state, and this also demonstrates the dignified, deliberative democratic process all voters expect and deserve. The people of Michigan spoke, and we listened. This smart solution – one that I have worked on over the past five years – will deliver real savings to all drivers across the state.”

Beginning 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. 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.

“Good things come to those who wait,” said Bellino, of Monroe. “Long-awaited car insurance that’s affordable to hard-working Michigan families is now a reality. After being forced to wait decades for state government leaders to step up and do something, drivers will no longer be forced to purchase insurance plans that are the most expensive in the nation. Cutting costs for Monroe and Wayne county families has been my top priority, and it feels good to have followed through on fixing our broken no-fault car insurance system and deliver real rate relief for all drivers across Michigan.”

Other reforms include:

• Non-driving factors, such as zip codes, home ownership and educational level, can’t be used to determine rates.
• An anti-fraud unit will help crack down on those abusing the system, which should help further lower car insurance rates.
• A fee schedule will be established and 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.