Michigan Auto Insurance Bill: Governor's Signature Anticipated

On May 30, 2019, Governor Gretchen Whitmer signed historic bipartisan no-fault auto insurance reform legislation to lower costs for Michigan drivers, maintain the highest coverage options in the country, and strengthen consumer protections. The legislation, which came into effect on July 1, 2020, offers Michigan drivers new choices and lower-cost insurance options.

The bill was signed by Governor Gretchen Whitmer

On May 30, 2019, Governor Gretchen Whitmer signed historic bipartisan no-fault auto insurance reform legislation (Public Acts 21 and 22 of 2019) to provide insurance coverage options, lower rates for Michigan drivers, maintain the highest benefits in the country, and strengthen consumer protections. The bill signing took place at the Grand Hotel during the Mackinac Policy Conference.

The bill ended Michigan's unique requirement that motorists purchase auto insurance policies that guarantee uncapped lifetime medical benefits in the event of a catastrophic crash. Instead, insurers can now sell reduced-coverage policies but are mandated to lower medical premiums for eight years. The bill also prohibits insurers from considering non-driving factors like sex, marital status, and credit score when setting rates.

Governor Whitmer had initially stated that she would veto any auto insurance reform bill that includes a full medical opt-out for drivers with qualifying health insurance. However, she conceded to GOP leaders on this point in the final version of the bill. Despite this concession, she celebrated the new legislation as an example of bipartisan cooperation, urging lawmakers to continue working together to fix the problems facing Michigan.

The auto insurance reform bill signed by Governor Whitmer is expected to lower costs for Michigan drivers and provide them with more options for coverage. However, critics argue that it may strip important treatment guarantees for catastrophically injured motorists and shift costs to other forms of insurance, including taxpayer-funded programs like Medicaid.

The bill provides insurance coverage options

On May 30, 2019, Governor Whitmer signed bipartisan no-fault auto insurance reform legislation to provide insurance coverage options, lower rates for Michigan drivers, maintain the highest benefits in the country, and strengthen consumer protections. The new law applies to auto insurance policies issued or renewed after July 1, 2020.

Michigan previously had the highest auto insurance benefits, but also the highest costs. Mandatory unlimited Personal Injury Protection (PIP) medical benefits proved too expensive for many Michigan families, and some drivers who could not afford the costly unlimited coverage were driving uninsured. The new law lowers premiums while still offering a choice of coverage options, including unlimited lifetime PIP medical benefits.

Drivers in Michigan now have a choice of four No-Fault PIP medical benefits coverage levels: (1) $50,000 for drivers enrolled in Medicaid; (2) $250,000; (3) $500,000; and (4) unlimited or no limit. These new No-Fault medical coverage choices became available in policies issued or renewed after July 1, 2020.

Drivers who have Medicare can choose to opt out of No-Fault PIP medical benefits altogether. However, if they are injured in a car accident, No-Fault will not pay for any accident-related medical bills. The legislative intent behind this change is that these drivers would turn to Medicare for medical coverage for injuries suffered in a car accident. The Medicare/opt-out option will become available in policies issued or renewed after July 1, 2020.

The new law also includes other significant changes, such as attendant care limits, a fee schedule, and increased bodily injury liability coverage. It is essential for drivers and car accident victims to understand how these changes may impact their legal rights and their ability to recover No-Fault PIP benefits after a car crash.

The bill lowers insurance rates for Michigan drivers

On May 30, 2019, Governor Gretchen Whitmer signed a bipartisan no-fault auto insurance reform bill into law, which came into effect on July 1, 2020. The bill was designed to lower insurance rates for Michigan drivers, who previously had to pay the highest costs in the country.

Michigan drivers were previously required to carry "unlimited" No-Fault medical coverage, which proved too expensive for many families. The new law gives drivers the option to reduce their premiums by relying on their own health insurance for their medical bills. The bill also offers four No-Fault PIP medical benefits coverage levels: $50,000 for drivers enrolled in Medicaid, $250,000, $500,000, and unlimited or no limit.

In addition, the new law prohibits auto insurance companies from using non-driving-related factors such as sex, marital status, home ownership, credit score, and occupation to set car insurance prices. It also increases the minimum coverage for bodily injury liability insurance and raises the maximum recovery amount for car accident-related vehicle damage under Michigan's mini tort law.

The bill also includes other changes to Michigan's No-Fault law, such as opt-outs for drivers with Medicare, limitations on attendant care, and a fee schedule for medical providers. These changes aim to give drivers more choices and flexibility while also lowering insurance rates.

The bill maintains the highest benefits in the country

On May 30, 2019, Governor Whitmer signed a historic bipartisan no-fault auto insurance reform bill that maintains the highest benefits in the country while lowering rates for Michigan drivers. The bill, Public Acts 21 and 22 of 2019, took effect on June 11, 2019, and applies to auto insurance policies issued or renewed after July 1, 2020.

Michigan previously had the highest auto insurance benefits and costs in the country. Mandatory unlimited Personal Injury Protection (PIP) medical benefits proved too expensive for many Michigan families, resulting in some drivers going without insurance. The new law addresses this issue by providing drivers with a choice of coverage options, including unlimited lifetime PIP medical benefits, while still lowering premiums.

Under the new law, drivers can choose from four No-Fault PIP medical benefits coverage levels: $50,000 for drivers enrolled in Medicaid, $250,000, $500,000, or unlimited. Additionally, drivers with Medicare can choose to opt out of No-Fault PIP medical benefits altogether, although No-Fault will not cover any accident-related medical bills in this case. This change is intended to allow these drivers to rely on Medicare for medical coverage following a car accident.

The new law also includes other significant changes, such as limits on attendant care, a fee schedule for medical providers, increased bodily injury liability coverage, and the elimination of certain non-driving factors that insurance companies can use to set rates. These changes aim to provide insurance coverage options, lower rates for Michigan drivers, maintain the highest benefits in the country, and strengthen consumer protections.

The bill strengthens consumer protections

On May 30, 2019, Governor Whitmer signed a bill to provide insurance coverage options, lower rates for Michigan drivers, and strengthen consumer protections. The bill, Public Acts 21 and 22 of 2019, took effect on June 11, 2019, and applied to auto insurance policies issued or renewed after July 1, 2020.

Additionally, the bill established a Fraud Investigation Unit to investigate criminal and fraudulent activity related to insurance and financial markets. This unit enhances consumer protection by deterring and addressing fraudulent activities that may harm consumers.

The bill also increased transparency and oversight of the Michigan Catastrophic Claims Association (MCCA). The MCCA is now required to provide annual reports to the Legislature, post an annual consumer statement on their website, and undergo audits by the Michigan Department of Insurance and Financial Services (DIFS) every three years. This increased transparency ensures that the MCCA is accountable to consumers and that their practices are fair and in the best interests of policyholders.

Furthermore, the bill introduced prior approval requirements for auto insurance rates and policies. All rates and policies must now be filed with and approved by DIFS before being offered to consumers. This measure ensures that consumers are protected from unfair or excessive rate increases and that insurance companies cannot unilaterally change rates without regulatory oversight.

The bill also allows for increased fines and penalties for insurance companies, agencies, and licensed agents who violate the law. This provision strengthens consumer protection by providing a stronger deterrent against unlawful practices and encourages companies to uphold the rights and interests of consumers.

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