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Monday, 30 November 2020 23:31

Michigan Officials Applaud Further Cost Reductions for Drivers Under Auto Insurance Reform

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Michigan Gov. Gretchen Whitmer and the Michigan Department of Insurance and Financial Services (DIFS) on Nov. 25 applauded further cost reductions drivers will see under the state’s new auto insurance reform law, as the Michigan Catastrophic Claims Association (MCCA) announced a reduction in its annual assessment charged on auto insurance policies.

The 14% savings per vehicle to the assessment reflects a further reduction in costs achieved through the historic, bipartisan auto insurance reform that Whitmer signed into law in 2019.  
 
“It is clear that the new auto insurance law is putting more money in the pockets of Michiganders. The reduction in the MCCA annual assessment is another example of how the reform is helping to reduce costs and provide savings for Michigan families,” said Whitmer. “In these difficult times, it is more important than ever that Michiganders see rate relief. I’m pleased that these reforms are continuing to result in greater savings than required in the law.” 
 
The reduced assessment announced Nov. 25 to $86 per vehicle will take effect July 1, 2021. This is the second time the assessment has been reduced due to cost reductions under Michigan’s new auto insurance reform law, with a drop from $220 per vehicle to $100 per vehicle that took effect July 2, 2020.  
 
Under Michigan’s old auto insurance law, each driver had to purchase unlimited Personal Injury Protection (PIP) medical coverage and pay the MCCA assessment, which reimburses insurers for catastrophic medical claims.

 

Under the new law, Michigan drivers can still choose unlimited medical coverage but can now also choose the level of PIP medical coverage they want when they start or renew a policy, and only drivers who choose unlimited PIP medical coverage pay the MCCA assessment, as long as the fund  does not have a deficit.  

 

"Drivers are continuing to benefit from the new choices and new protections from Michigan’s new auto insurance law,” said Lt. Gov. Garlin Gilchrist II. “Today’s announcement is one more reminder that there has never been a better time to get car insurance in Michigan, as drivers can choose the coverage that’s right for them and see real savings.” 
 
“This reduction in the MCCA annual assessment is a direct result of the new law, and in our role as a consumer protection agency, it is our priority...


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