We don’t expect to see meaningful savings from Michigan auto insurance reform until July 2021 – July 2022. We’ve known about the auto insurance no-fault reform in Michigan for awhile now and it has been active since July 2, 2020. But the impact it will have on rates is still a work in progress. If you’re unfamiliar, the no-fault auto insurance reform was widely presented as a cost savings of $120 per car. This hasn’t turned out to be true, leaving people wondering when they can expect to see savings from this reform.

In case you’re unfamiliar, in 2019 a historic bipartisan auto no-fault legislation was passed with the intention of lowering auto insurance costs while keeping coverage options and improving policy protections. But that’s half the story. The other motivation for the reform was the fact that rising auto insurance costs have led to many driving without insurance, putting a huge strain on the court systems.

Whatever the case, the true impact of the reform probably won’t be seen until July 2021 – July 2022. The reason for this is that these insurance companies need to understand if their rates are right based on how this reform impacts them. From there they will submit any revisions to the State of Michigan in order to find ways to better help auto policy holders save more money.

<<WATCH: Michigan Auto Insurance Reform – Give It Time Before You Start Seeing Savings>>


“Give it time, where there’s a lot of people that are saving some money, there’s still some people where the costs are actually going up. And with a change of this magnitude, where every single rating factor seems to be a little bit different. And this is a applied or rolled out across every single company, it’s going to take time for each and every one of these companies to perfect their rates or to change their formula where the rates are, for most everybody, starting to come down. We’re projecting or expecting that over the next 12 to 24 months, as each of these companies sees the sample of quotes that they have, and they can understand if their rates are right or not. What they’re going to do is they’re going to submit those rate revisions into the state and they’re going to request changes and adjustments which should better or help out clients in terms of saving money. So it’s a process that’s going to take some time, and we do have to be patient with it. But once we get to about a year or so into this, I think we should see some more meaningful changes and where those rate adjustments match what the state’s intents were when they rolled this out.”

What We Do Know About Michigan Auto Insurance Reform

  • Personal Injury Protection (PIP): New coverage limits will meet or exceed the highest benefits in the country while also allow driver the option to choose coverage options that fit their need/budget.
  • Premiums: Starting July 1, 2020, insurance agencies will need to reduce premiums from 10%-45% or more depending on the PIP option selected by the auto policyholder.
  • Fee Schedule: The reform will set a fee schedule that makes the payout of these charges much more manageable for auto insurance companies.
  • Michigan Catastrophic Claims Association (MCCA) Assessment: The reform will result in a lowering of per vehicle assessments starting July 2, 2020, with estimated savings of at least $120 per car and those with unlimited PIP medical coverage will not pay any assessment to the MCCA.