Democratic Governor, Gretchen Whitmer, is already threatening to veto the bill that was just passed by Senate on Tuesday. She says, “there are no guarantees costs will go down for drivers.” This is alarming breaking news for Michigan drivers.
Here is a brief breakdown of how this bill would benefit drivers, insurers and healthcare providers:
- Drivers would now have a choice of PIP levels, or none at all.
- Hospitals would no longer be able to charge what they see fit for medical care of auto accident victims. They would be forced to follow the workers’ compensation fee schedule.
- It would require the Michigan Catastrophic Claims Fund to be transparent about how much money it has and would create an auto insurance task force to be run by Michigan State Police.
- Also included in the bill is language that would prevent insurers from basing insurance rates on gender, zip code, education level and credit score.
- The bill made it out of the Senate with Republican, and some Detroit Democrat, votes.
Now, Whitmer says “I am only going to sign a bill that protects drivers and these bills do not do that.” She wants a bi-partisan effort from both the House and the Senate, stating “if they are serious about getting this done, then negotiations should commence. If they want to play politics, I’ve already told you what’s going to happen.”
On the flip side, Speaker Lee Chatfield of Levering says, “our goal is to get a signature by Governor Whitmer and deliver insurance rate relief for the people of our state. We’re going to have the conversations that are necessary to make that happen.”
Just this past Tuesday, Michigan’s Senate passed legislation that aims to cut auto insurance premiums for Michigan drivers. This is the news every driver in Michigan has been waiting for, as rates are nearly double the national average in Michigan. The plan is to eliminate the requirement for drivers to have unlimited medical benefits, which covers major injuries in an accident.
No other state in the USA has this requirement. With this new option, Michigan drivers can choose lower levels of PIP (personal injury protection), or no coverage (in the case they have qualifying health coverage).
This measure is largely backed by the Republican party, which won the approval with a 61-49 vote that rendered after 2:00 AM. The current Michigan auto insurance system is failing, as the rates have kept many people from being able to afford to drive. Or, in some cases, people are taking the risk of driving without insurance – a lose/lose situation in the case of a traffic violation or accident. The average Michigan insurance rate is $2,610 per year, astonishingly high.
Under this bill, drivers could opt out of personal injury coverage, or choose between two required offerings from insurers: $50,000 (including $200,000 only for emergency trauma care immediately after a crash) or $250,000 total.
Auto insurance companies complain that they are charged more by hospitals and providers than healthcare companies, and those expenses are passed on to drivers. This bill would create a fee schedule similar to what exists for workers’ compensation injuries.
In related news, Detroit Mayor Mike Duggan filed a lawsuit last year asking for the outdated Michigan no-fault insurance law to be dropped, as he claims it is unconstitutional and fails to provide “fair and equitable” insurance rates. Detroit businessman Dan Gilbert has talked about backing a 2020 ballot initiative if lawmakers do not act.
So, what happens next for Michigan drivers and Michigan auto insurance? Follow Entrust Insurance Agency for the latest.