Written by Maurice Davis
Insurance costs have been a top priority for Michigan lawmakers for years. The effects of Michigan no-fault insurance requirements have primarily affected consumers. In fact, Michigan has the highest car insurance rates in the country. In 2020, legislators rolled out changes to the no-fault insurance system to benefit Michigan consumers.
Eliminates Discriminatory Factors in Insurance Pricing
One of the primary changes introduced in 2020 is the elimination of insurance pricing factors that are unrelated to an individual’s driving history. Prior to 2020, insurance companies could change consumers’ rates based on their zip code, gender, occupation, home ownership status, marital status, and other factors.
While these factors will be removed from insurance pricing considerations, insurance providers will still be able to determine prices based on a consumer’s credit score.
Rollbacks on PIP Coverage
For many consumers, the best part of Michigan no-fault insurance reforms is rollbacks on PIP coverage costs. Personal injury protection covers an individual’s medical and property damage expenses after a crash, regardless of who caused the accident. With 2020 reforms, consumers can choose from several different PIP options. Costs are expected to drop an average of 10% for those who choose unlimited PIP coverage, 20% for those who opt for $500,000 of coverage, 35% for consumers who purchase $250,000 of coverage, and 45% for those with $50,000 of coverage.
Proposed rollbacks will last just eight years. After the initial eight-year period, insurance companies will have to get their rates approved by the Michigan Department of Insurance and Financial Services.
Another change to PIP coverage is the annual $220 Michigan Catastrophic Claims Association fee. Previously, drivers who opted for less than unlimited coverage had to pay a $220 fee. Now, all drivers with insurance will pay $100 each year to the fund.
Why There is a Push to Lower Car Insurance Premiums
While Michigan’s no-fault system was developed to keep streets safer and make it easier for consumers to get their medical bills covered, it has actually made streets less safe in many parts of the state. A surprising amount of drivers do not have any insurance, driving up costs for insured drivers throughout Michigan. Reform aims to make it easier for consumers to get insurance, lowering rates for everyone and keeping insurance companies in check.
Although 2020 reform reflects significant improvement in the auto insurance industry of Michigan, this legislation is not the finish line. Legislators are still working on reforming the auto insurance industry even more. They hope to implement additional changes that make car insurance more affordable for families.
What This Means for Drivers
If you get in a car accident, you may wonder how these reforms impact your options. The goal is to increase coverage throughout the state. This could benefit drivers involved in car accidents. Rather than having to pursue drivers directly for compensation, victims can go to the other driver’s insurance company. Regardless of whether or not the other driver involved in your accident has insurance, it’s crucial to work with a personal injury attorney. They can help you pursue the compensation you deserve.
Reach Out to Davis Injury Lawyers If You’re Involved in a Car Accident
A car accident can leave you with unpaid medical bills, time away from work, and property damage. With the help of Davis Injury Lawyers, PLLC, you can pursue compensation from the responsible party. Explore your options now by filling out our contact form or calling us directly at (313) 462-7979.