LANSING, Mich. (Michigan News Source) – In July of 2022, Michigan Governor Gretchen Whitmer was still celebrating the “cost savings” provided by the auto no-fault reform law in Michigan. The governor put out a press release congratulating herself for “reducing costs” and the fact that her administration was able to send out $400 “refund” checks per vehicle. Now, it looks like the insurance companies are clawing back any savings that Michigan drivers were promised.
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The auto no-fault reform law legislation wasn’t just a Democratic priority though – it was a bipartisan effort, passing the senate with a 34-4 vote and the house by 94-15, with the governor signing the legislation into law.
The legislation removed providing unlimited lifetime medical coverage to people seriously injured in an auto accident and was designed to give Michigan motorists rate reductions. However, that appears to have been an empty promise.
The Detroit Free Press is reporting that fee hikes will kick in on July 1st when higher “catastrophic claims” fees begin. And those hikes are even targeted at those who opt OUT of any catastrophic no-fault coverage.
Back when Democrats and Republicans were touting the legislation in May of 2019, Governor Gretchen Whitmer said, “Today’s vote is truly historic. We’ve accomplished more in the last five months than in the last five years. This vote demonstrates that when both parties work together and build bridges, we can solve problems and make life better for the people of Michigan.”
Most Michiganders would likely argue that life is not “better” when their car insurance rates go up after being promised that they would be lowered. However, last fall, the Michigan Catastrophic Claims Association (MCCA) decided to raise their annual per-vehicle assessments on ALL Michigan auto insurance policies. MCCA manages the catastrophic care fund and is a nonprofit corporation controlled by the insurance industry.
The MCCA’s last annual report showed that their $5 billion surplus in 2020-21 went to a $3.7 billion deficit in the fiscal year ending June 20th – due to the $400 checks, the declines in the stock market and a court decision that overturned some no-fault medical cost controls that they were trying to impose on previous crash survivors. That case went to the Michigan Supreme Court and a decision is expected by the end of their term on July 31st.
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Drivers choosing the unlimited lifetime medical coverage (personal injury protection) will be charged $122 instead of $96 and drivers who choose any other PIP option will be charged a $48 assessment for “deficit recoupment.”
