Lawmaker’s sweeping legislation to scrap state’s no-fault law

State Rep. Jason Sheppard today unveiled legislation as part of an eight-bill package repealing Michigan’s no-fault auto insurance system to bring significant relief to drivers paying the nation’s most expensive insurance premiums.

Sheppard’s measure eliminates the no-fault system and moves Michigan to a full tort system similar to other states such as Ohio.

“Insuring a car shouldn’t be one of the largest monthly expenses for any family,” said Sheppard, of Temperance. “The fact that Michigan continues to be in gridlock over our broken no-fault car insurance system while families are paying highest-in-the-nation insurance premiums is appalling. We need a swift, meaningful solution now. Forcing drivers into financial hardship to drive legally isn’t the logical way forward. I am committed to delivering affordable rates for all motorists across the state.”

The plan continues the mandate that all Michigan drivers have insurance, but provides more choice and flexibility by eliminating the mandate to buy unlimited medical coverage. Accident victims will have the ability to sue at-fault drivers for economic damages and non-economic damages such as pain and suffering.

Colorado abandoned its no-fault system in 2003. According to a 2008 governor’s study, the average car insurance premium in the state decreased 35 percent since the state moved to a tort auto insurance system. Michigan drivers could see greater savings by parting ways with its no-fault system, which is the only one in the nation mandating unlimited medical coverage.

Michigan is one of 12 states operating with a no-fault system, and others have also recently debated a repeal.

Sheppard noted that repealing Michigan’s no-fault system and replacing it with a tort system will draw more insurance companies to the state, which will in turn create more competition to even further drive down insurance rates.

State Reps. Joe Bellino of Monroe, Bronna Kahle of Adrian, Beau LaFave of Iron Mountain, and Aaron Miller of Sturgis have joined Sheppard in cosponsorship.

The bill package, House Bills 4397-4404, has been referred to the House Insurance Committee.