Michigan’s Plan to Lower Car Insurance

Michigan is in the minority of states that requires its drivers to carry no fault car insurance. No fault insurance is different from traditional auto insurance since it requires Michigan car insurance companies to pay for any damages and medical expenses for their clients, regardless of who was at fault for the accident. The typical way auto insurance works is to determine the driver at fault and have their insurance company be responsible for all damages and expenses occurred in the accident.

The Michigan Office of Financial and Insurance Regulation has put together a set of minimum requirements for drivers and owners of registered vehicles in the state. The no fault insurance mandated by the local government has multiple parts. The first aspect of the current requirements is the Personal Injury Protection, or PIP, policy. The PIP not only coverage the insured’s medical expenses after an accident, it will all pay back wages for up to three years. There is a cap on the wage back pay but it is still great benefit. Another element of the no fault insurance is the Property Protection Insurance, PPI, that will pay up to $1 million in vehicle and property damages. One of the big benefits to no fault insurance is the additional protection it offers motorists from being sued by another party in the accident. There are exceptions to that rule but the majority of Michigan drivers are safe from this type of legal action.

Michigan offers additional insurance protection as well that can be purchased on top of the minimum requirements including comprehensive, collision and uninsured motorist policies.

However, it has been found in other states that areas that utilize the no fault insurance laws tend to have higher car insurance premiums that states that keep the at fault process. The coverage for policy holders is great but now the insurance companies may be seeking relief. In January 2012, Representative Peter Lund, chair of the House Insurance Committee, started pushing House Bill 4936. 4936 wants to limit some of the medical coverage drivers are entitled to in Michigan. Those against the bill suggest that may of the worst accident cases have victims that need that additional coverage to pay for their ongoing medical treatment and expenses. Those for the bill suggest that trimming what the insurance companies pay out annually in claims will benefit drivers with lower premiums for their car insurance.

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