Wednesday, 29 May 2019 21:12

Car Insurance Laws Are Changing in Michigan

Written by Steven Gursten, JD Supra


The new Michigan No-Fault law was passed by the Michigan Legislature today.

Lawmakers in the House of Representatives voted 94 to 15 in favor the No-Fault reform plan in Senate Bill 1 and the Senate concurred by a vote of 34 to 4.


Senate Bill 1 now goes to Gov. Gretchen Whitmer, who is expected to sign the bill into law.


In an early morning statement on May 24, Gov. Whitmer stated she was looking “forward to working with the legislature to pass and sign this important [bipartisan auto no-fault reform] legislation into law.”


In the late afternoon, after the House and Senate had passed Senate Bill 1, Gov. Whitmer praised the Legislature’s “truly historic . . . vote,” which resulted in the “passage” of the new Michigan No-Fault law:


“This plan will help drivers from Detroit all the way to the U.P. It guarantees lower auto insurance rates for eight years, protects people’s choice to pick their own insurance and coverage options while preserving the safety net, and bans insurance companies from using discriminatory non-driving factors when setting rates.”


Michigan’s auto No-Fault law has now undergone substantial and very significant changes that will affect every driver in Michigan.


Here’s what has changed with the new Michigan No-Fault law:


No-Fault PIP Choice: No longer will all drivers be required by law to purchase unlimited No-Fault Michigan PIP benefits. Drivers now will have the choice of the following No-Fault medical benefit coverage levels: $50,000 (if a driver is enrolled in Medicaid); $250,000; $500,000; or “no limit.”


Opt-Out of No-Fault PIP medical benefits: Drivers with Medicare may “elect to not maintain coverage” for No-Fault PIP medical benefits.


Savings for drivers: The driving force behind today’s new No-Fault law has been the public outcry over the high costs of auto insurance. That pressure got to politicians on both sides to do something to lower auto insurance prices. For policies effective after July 1, 2020, and before July 1, 2028, the new Michigan No-Fault law promises 45% savings for drivers who opt for the $50,000 cap on No-Fault PIP medical benefits; 35% savings for drivers who opt for the $250,000 cap; 20% savings for drivers who choose the $500,000 cap; and 10% savings for drivers who wish to have “no limit” and maintain their unlimited No-Fault medical benefits.

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