Historic no-fault overhaul signed into Michigan law

State Rep. Doug Wozniak today noted historic car insurance reforms have been signed into Michigan law, guaranteeing lower rates for drivers in Macomb County.

The bipartisan reforms – approved earlier by Wozniak and the Legislature – give drivers more choice on personal injury protection (PIP) coverage, maintain the best life-saving medical benefits in the country, stop price gouging on medical services for car accident victims and combat fraud within the system. Motorists, depending on the PIP coverage level they choose, could save hundreds of dollars or more each year.

“A lot of good faith was poured into these reforms, and although not perfect, Michigan has definitely taken the first step to deliver much-deserved rate relief to drivers across the state,” said Wozniak, of Shelby Township. “Nothing is permanent and I’m sure over time when more ideas for reforms are discussed, we will continue working together on bettering the state’s no-fault system for every Michigan family. Despite some questions still left unanswered, today is definitely a day worth celebrating.”

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, with no corresponding cap on what medical providers may charge accident victims. The new 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.

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