Reforms to Michigan’s no-fault insurance law that took effect in July of 2020 have saved Michigan drivers $4 billion on auto insurance premiums. Additionally, Michigan drivers are paying reduced fees to the Michigan Catastrophic Claims Association for another $1 billion in savings.
The MCCA plans to send drivers a $400 per vehicle refund in 2022. This will save drivers another $3 billion.
Auto insurance reforms
Michigan’s auto insurance reforms allow drivers to purchase insurance that is cheaper but includes less coverage for personal injury cases. The reforms also reduced the reimbursement rates for long-term care facilities that provide care to people injured in automobile crashes.
While these reforms have saved Michigan drivers money on their insurance premiums, advocates say some crash victims do not get the care they need because the rate cuts caused some providers to shut down or stop accepting crash victims as patients.
While Michigan insurance rates declined by 18%, the state still has some of the highest insurance rates in the country. Additionally, minority drivers still pay higher rates than other drivers with similar driving records.
While the no-fault reforms have resulted in substantial insurance rate decreases, the reforms have also harmed victims of catastrophic auto accident injuries. Not only are there fewer treatment options, but there is less money in the MCCA fund and many drivers now carry less coverage for personal injuries on their policies which could leave them without enough coverage to pay for medical bills. Lawmakers may need to consider additional reforms.