Whitmer's Plan To Limit Auto Insurance Fees

Governor Gretchen Whitmer has been working to limit auto insurance fees in Michigan. In 2019, Whitmer signed a law to reduce surcharges and cap benefits, leading to a $5 billion surplus in the Michigan Catastrophic Claims Association (MCCA) fund as of June 2021. Whitmer called on the MCCA to issue refunds to auto insurance customers, and by May 2022, $2.2 billion in refunds had been issued to eligible Michiganders. Additionally, the 2019 auto insurance reform law allowed drivers to choose lower levels of personal injury protection and prohibited insurers from considering non-driving factors such as sex, marital status, and credit score when setting rates. However, there has been recent legislation in the Michigan Senate that, if approved, could increase insurance costs for Michigan drivers by raising reimbursement rates for medical providers. Whitmer opposes this plan, arguing that it will make auto insurance less affordable for Michigan residents.

Refunds from the Michigan Catastrophic Claims Association (MCCA) fund

Governor Gretchen Whitmer has been working to limit auto insurance fees in Michigan. In 2024, she announced that billions of dollars in auto insurance refunds had been issued to Michiganders. This was a result of the bipartisan auto insurance reform she signed into law, which put nearly $2.2 billion back in people's pockets.

The Michigan Catastrophic Claims Association (MCCA) fund had a $5 billion surplus as of June 2021. Governor Whitmer called on the MCCA to return the maximum amount of surplus funds to Michigan drivers while ensuring the viability of the fund. The MCCA transferred $3 billion to Michigan insurers, who were responsible for issuing refunds to eligible drivers, while retaining $2 billion to ensure continuity of care for accident survivors.

The refunds were in the amount of $400 per vehicle or $80 per historic vehicle and were sent out in the form of paper checks or ACH deposits. Eligible drivers did not need to take any action to receive their refund, but they could verify their address or banking information with their insurance company to prevent delays.

The deadline for auto insurers to issue the remaining refunds was May 9, 2022. After this date, eligible drivers who had not received their refunds were instructed to contact their auto insurer or agent, or the Department of Insurance and Financial Services (DIFS) for assistance.

Bipartisan auto insurance reform

Governor Gretchen Whitmer of Michigan has been working to limit auto insurance fees through a series of bipartisan auto insurance reforms. In 2019, she signed a law to reduce surcharges and cap benefits for the Michigan Catastrophic Claims Association (MCCA) fund, which had accumulated a $5 billion surplus. This fund reimburses insurers for catastrophic medical claims. The 2019 reform allowed drivers to choose lower levels of personal injury protection and reduced the MCCA annual assessment, resulting in cost savings for Michigan residents.

However, in 2023, the Michigan Senate voted to reverse some of the health care cost controls from the 2019 auto insurance overhaul. The new legislation would increase reimbursement rates for medical providers who care for seriously injured motorists, undoing cuts to facilities and lifting a 56-hour per-week cap on payments for family care. Governor Whitmer opposed this plan, arguing that it would increase insurance costs for Michigan drivers. She warned that the proposed changes would "substantially impact auto insurance affordability across the state."

Despite her warnings, the legislation passed with a bipartisan vote of 23-14 and moved to the Michigan House. The new law would allow motorists with Medicare or private health insurance to purchase policies without personal injury protection. It would also provide lower-income motorists with Medicaid health insurance the option to purchase auto plans with as little as $50,000 in medical coverage. Other drivers could select plans with higher levels of protection.

In response to the 2023 legislation, Governor Whitmer announced that $2.2 billion in auto insurance refunds had been issued to Michiganders as a result of the 2019 bipartisan auto insurance reform. She emphasized that these refunds would help families with their financial needs and lower costs. The refunds were in the amount of $400 per vehicle or $80 per historic vehicle, and auto insurers were given a deadline to issue the remaining refunds.

Overall, Governor Whitmer's efforts to limit auto insurance fees through bipartisan auto insurance reform have resulted in cost savings for Michigan drivers. However, ongoing debates and changes to the legislation highlight the complex nature of auto insurance policy and the need for continued cooperation between political parties.

Cost controls and consumer protections

The reform law created a tiered fee schedule for medical providers, capping the rates they could charge auto insurers for motorist care. This was expected to reduce costs for insurance companies and, consequently, for consumers. The law also allowed drivers to choose lower levels of personal injury protection, providing an alternative to what had previously been a mandatory lifetime care guarantee.

The reform law also provided for increased consumer protections. It prohibited insurance companies from using certain non-driving factors when establishing premiums, such as sex, marital status, and credit score. It also provided stronger anti-fraud protections and increased fines and penalties on insurance companies, agencies, and licensed agents.

The cost controls and consumer protections put in place by the reform law resulted in a $5 billion surplus in the Michigan Catastrophic Claims Association (MCCA) fund as of June 2021. This surplus was due largely to a benefits cap on payouts for catastrophic injury claims. In November 2021, Governor Whitmer called on the MCCA to return a significant portion of this surplus to Michigan drivers in the form of refund checks. As a result, $2.2 billion in refunds were issued to eligible Michiganders, with more refunds expected in the future.

Limits on payments for long-term care

Governor Gretchen Whitmer has been working to limit auto insurance fees in Michigan. In 2019, she signed a law to reduce surcharges and cap benefits, which included limits on payments for long-term care for crash victims. This law has been controversial, with some arguing that it will compromise the care of seriously injured motorists.

The 2019 law ended the requirement for motorists to purchase auto insurance policies with uncapped lifetime medical benefits in the event of a catastrophic crash. Instead, insurers can now sell reduced coverage policies but are mandated to reduce medical premiums for eight years. This change will result in varying savings for drivers, depending on their level of medical coverage.

The law also allows drivers to opt for lower levels of personal injury protection, providing an alternative to the previous mandatory lifetime care guarantee. However, critics argue that this will strip important treatment guarantees for those who are catastrophically injured and shift costs to other forms of insurance, including taxpayer-funded programs.

In response to the 2019 law, the Michigan Senate recently passed legislation to amend it, which, if approved by the House and signed by Whitmer, would increase the prices medical providers can charge insurance companies for treating people injured in car accidents. This proposed change has been opposed by Whitmer and her administration, who argue that it will lead to higher insurance costs for Michigan drivers, especially low-income families and individuals.

Whitmer has also called on the Michigan Catastrophic Claims Association (MCCA) to issue refund checks to auto insurance customers, citing a $5 billion surplus in the fund as of June 2021. While the governor cannot order the MCCA to send payments, the fund's executive director has stated that it is under consideration. The surplus in the MCCA fund is largely due to the benefits cap on payouts for catastrophic injury claims implemented in the 2019 law.

Prohibiting insurers from considering non-driving factors

Governor Gretchen Whitmer of Michigan has been working to limit auto insurance fees for her constituents. One of the ways she has done this is by signing a no-fault auto insurance reform bill into law. This law addresses the high cost of auto insurance in Michigan, which has been a point of contention for many years.

One of the key provisions of the new law is the prohibition of insurers from considering certain non-driving factors when establishing premiums. This means that insurers will no longer be able to use factors such as sex, marital status, and credit score to set rates. This is significant because these factors have been known to disproportionately affect certain groups, such as low-income individuals and families. By prohibiting insurers from considering these factors, the law helps to ensure that insurance rates are based primarily on driving-related factors and risks.

The new law also provides drivers with more choices and protections. For example, drivers can now choose the level of Personal Injury Protection (PIP) medical coverage they want, rather than being required to purchase unlimited coverage. This allows drivers to select the amount of coverage that is right for them and their families, which can result in significant cost savings. Additionally, the law includes stronger anti-fraud protections and increases fines and penalties for insurance companies, agencies, and licensed agents.

The prohibition of considering non-driving factors is just one of the many ways that Governor Whitmer is working to limit auto insurance fees and protect consumers. By implementing these reforms, she is helping to put more money back into the pockets of Michiganders and make auto insurance more accessible and affordable for all residents. These changes also encourage more drivers to purchase insurance, which increases the overall safety and protection of motorists on the road.

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