Michigan Gov. Gretchen Whitmer
speaks before signing auto
insurance legislation on
Thursday, May 30, 2019, at the
Detroit Regional Chamber's
Mackinac Policy Conference at
the Grand Hotel on Mackinac
Island, Mich. Whitmer signed the
overhaul of Michigan's car
insurance system that will let
drivers forego unlimited medical
benefits to cover crash injuries
in which she declared it an
"historic day" because the cost
of auto insurance will go down.
(Photo by HB Meeks/Tell Us USA
News Network)
Michigan
governor
signs
overhaul
to cut
high
auto
premiums
By
DAVID
EGGERT
APNews.com
MACKINAC
ISLAND,
MI -
Gov.
Gretchen
Whitmer
on
Thursday
signed a
“historic”
overhaul
of
Michigan’s
car
insurance
system
that,
beginning
in 13
months,
will let
drivers
choose
their
medical
coverage
instead
of them
being
required
to buy
unlimited
benefits.
Her
signature,
delivered
at the
Detroit
Regional
Chamber’s
Mackinac
Policy
Conference,
capped
an
intense
three-week
period
in which
the
Republican-led
Legislature
proposed
bills,
the
Democratic
governor
threatened
a veto
and a
compromise
was
reached.
Starting
in July
2020,
motorists
will be
able to
pick
among
levels
of
personal
injury
protection
— which
on
average
accounts
for half
of
premiums
in a
state
with the
country’s
most
expensive
auto
insurance.
PIP
rates
will be
cut
entirely
for
those
who
fully
forgo
the
coverage
and
instead
use
qualifying
health
insurance
for
crash
injuries.
Insurers
will be
required,
for
eight
years,
to
reduce —
on
average—
the PIP
portion
of
policies
by 10%
(unlimited
benefit),
20%
($50,000),
35%
($250,000)
and 45%
($500,000).
They
will be
prohibited
from
using
non-driving
factors
such as
home
ownership,
educational
level,
occupation,
ZIP code
or
credit
scores
in
setting
rates.
And
health
providers,
beginning
in 2021,
will
charge
auto
insurers
less
than
they
have
been for
treating
and
rehabilitating
injured
drivers.
“Today
truly is
a
historic
day for
Michiganders.
These
are
important
improvements
as we
move
forward
in the
state,”
said
Whitmer,
who was
joined
by
lawmakers
and
Detroit
Mayor
Mike
Duggan.
“They’ll
help
Michiganders
from
Detroit
all the
way to
the
Upper
Peninsula,
because
people
across
our
state
are sick
and
tired of
paying
these
outrageous
rates.”
Duggan
estimated
that
most
people
will
save
$500 a
year,
while
Detroiters
will
save at
least
$1,000
with
many
saving
“a lot
more
than
that, in
significant
part
because
we will
no
longer
have to
double
pay for
medical
insurance.”
The
legislation
cleared
the
House
and
Senate
with
overwhelming
support
but has
come
under
criticism
from
insurance
companies,
patient
advocates,
hospitals,
brain
injury
facilities
and
others.
The
negligence
law
section
of the
State
Bar of
Michigan
this
week
laid out
several
concerns.
It
called
the bill
a
trade-off
between
quality
care and
premiums,
predicted
a
negative
impact
on
long-term
care and
rehabilitation
providers,
and said
the
measure
will
shift
risk to
drivers,
health
insurers
and
taxpayers
in the
form of
Medicaid
spending.
“The
likelihood
is that
this
bill
will
result
in
negligible
savings
to the
average
driver,
and it
comes at
the cost
of being
a
devastating
blow to
severely
injured
accident
victims
and the
caregivers
that
currently
treat
them,”
said
section
chairman
Robert
Raitt, a
personal
injury
lawyer
at a
Farmington
Hills
firm
that
specializes
in
serious
car
accidents.
“We
could
have
done so
much
better.”
Michigan
is the
only
state to
require
unlimited
PIP
coverage.
And
unlike
several
other
no-fault
states,
providers
treating
crash
victims
are able
to
charge
auto
insurers
far more
than
they do
for
other
patients
covered
by
private
or
government
health
plans.
The
average
premium
in
Michigan
is
$2,693,
according
to the
most
recent
report
from
insurance
comparison
website
The
Zebra —
83%
higher
than the
national
average
of
$1,470.
Detroit’s
premium
on
average
is
$5,464,
far
surpassing
any
other
U.S.
city.
House
Speaker
Lee
Chatfield,
a
Levering
Republican,
defended
the new
law,
saying
critics
“have
built
their
entire
business
model
around
auto
no-fault,
and
there’s
going to
have to
be an
adjustment
made.”
Republican
Senate
Majority
Leader
Mike
Shirkey
of
Clarklake
said the
current
system
provides
“unbelievable
services
and
unbelieveable
costs,”
and “was
unsustainable.”
“To
have
actual
real,
measurable
reform,
we had
to break
that
up,” he
said.
“Forty-nine
other
states
to one
degree
or
another
have
figured
this
out. I
don’t
see a
lot of
people
on
gurneys
in the
streets
because
they
aren’t
being
treated
as a
result
of an
auto
accident.
So we
shouldn’t
expect
anything
different.”