State department, insurance industry accelerating toward July 1 rollout

State Rep. Jason Wentworth, of Farwell, today announced the first rates approved by state regulators under terms of Michigan’s new no-fault car insurance law indicate substantial savings are in store for drivers.

“The state remains on track for the July 1 rollout – a day many Michigan families are looking forward to because drivers will finally receive the guaranteed savings they deserve,” said Wentworth, who serves as the chair of the House Select Committee on Reducing Car Insurance Rates. “If the first approved rates provide any indication, it’s that Michigan drivers are going to see even greater guaranteed savings in their car insurance policies than what is required by the new law.”

The first rates approved by Michigan Department of Insurance and Financial Services (DIFS) were filed by Insurance Services Office (ISO), a rate organization that provides rate information to the insurance industry. While ISO does not sell policies to consumers, insurance providers that are members of ISO may utilize rate information offered to craft their own policies to be sold to Michigan drivers.

“The department is working around the clock, conducting thorough reviews of all the proposed rates to ensure insurance providers are effectively transitioning into a new structure that provides more affordable products for every Michigan driver and their families,” Wentworth said. “I expect many more rate approvals in the coming weeks that either mirror the rates proposed by ISO or come in slightly lower to drive more competition among insurers.”

Below is a comparison of the personal injury protection (PIP) rate rollbacks mandated by state law compared to what DIFS approved for Insurance Services Office:
• Unlimited PIP coverage – 10 percent savings mandated by state law, 17.1 percent savings approved for ISO.
• $500,000 in PIP coverage – 20 percent savings mandated by state law, 22 percent savings approved for ISO.
• $250,000 in PIP coverage – 35 percent savings mandated by state law, 36.6 percent savings approved for ISO.
• $50,000 in PIP coverage – 45 percent savings mandated by state law, 56.1 percent savings approved for ISO.
• Michigan drivers who opt out of PIP coverage will see up to a 100 percent savings in that portion of their policies.

“I encourage drivers to start familiarizing themselves with the reforms, consulting with their agents and shopping around for the lowest possible rates sooner rather than later,” Wentworth said.

Reliable information regarding Michigan’s new no-fault car insurance law that takes effect July 1 is available by visiting www.Michigan.gov/AutoInsurance.

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