The cost of auto insurance is a burden for many Michigan drivers. In fact, our state has the highest average annual premium in the nation. I recently supported legislation to help lower costs and better protect Michigan insurance customers.
Michigan is one of 12 states that currently operate under a no-fault system of automobile insurance. Under the current system, a driver’s own insurance company covers all accident-related medical expenses and lost wages regardless of who caused the accident. Because of this, all motorists in the state are legally required to carry Personal Injury Protection (PIP) coverage, which pays for an individual’s medical expenses resulting from injuries sustained in an auto accident.
The legislation approved by the Senate includes a $400,000 cap for personal injury protection for people who have never paid into Michigan’s no-fault system. This would reduce costs and bring Michigan more in line with neighboring states. There is no reason for Michiganders to be covering unlimited PIP claims for out-of-state residents.
Senate Bill 787 would allow Michigan residents age 65 or older to have the option to choose a capped auto insurance plan that would preserve their benefits. Seniors who choose this plan would have their catastrophic claims assessment significantly reduced. Medicare would cover remaining expenses after the $50,000 limit is reached.
Fraud also drives up costs. Senate Bill 1014 would create the Michigan Automobile Insurance Fraud Authority to investigate and reduce fraud, estimated at $400 million annually. Other reforms ensure 24/7 care remains available for individuals injured in auto accidents and does not limit care provided by skilled professionals. The bills have been sent to the House for consideration.