Starting in 2020, drivers in Michigan will be able to opt out of personal injury protection or choose less coverage under the state’s new auto insurance reform law.
The bipartisan bill was signed Thursday by Governor Gretchen Whitmer after being approved by both the State House and Senate last week.
State Representative Greg Markkanen said the law will guarantee lower rates for drivers in the Upper Peninsula and across Michigan.
“I’m pleased to see our governor finally put in pen these historic changes to Michigan’s long-standing broken car insurance system,” said Markkenen. “The exorbitant cost of car insurance is by far the most common complaint I hear from Upper Peninsula drivers as I travel the district. I’ve listened to their concerns, and with bipartisan efforts, helped deliver a solution to make driving more affordable for families across Michigan.”
In addition to giving drivers more choice on personal injury protection, the law also seeks to combat fraudulent claims and take steps to rein in medical costs.
Also, non-driving factors, such as ZIP codes, home ownership, and educational level cannot be used to determine rates.
Markkanen said depending on the coverage level chosen, motorists could see hundreds of dollars or more in cost savings each year.
Starting 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.
- Non-driving factors, such as ZIP codes, home ownership, and educational level, cannot be used to determine rates.
- An anti-fraud unit will help crack down on those abusing the system, helping further lower car insurance rates.