Car Insurance Reforms Signed Into Law

Car insurance reform supported by Rep. Shane Hernandez was signed into state law last week, lowering costs for all Michigan drivers.  The reforms – approved by Hernandez and the Legislature – give drivers more choice on personal injury protection coverage, combat fraudulent claims and stop price gouging on medical services for car accident victims. Many Michigan families will save hundreds of dollars or more each year.  Michigan has had the most expensive car insurance in the nation mostly because it’s the only state mandating unlimited lifetime health care coverage through car insurance. The revised law will provide more affordable options while allowing those who currently use the unlimited coverage to keep it, and those who want it in the future to continue buying it.  “These reforms will get rid of what amounts to a burdensome and often unaffordable mandate on Michigan drivers, providing real rate relief,” said Hernandez, of Port Huron. “Eliminating the state mandate for unlimited medical coverage through car insurance is a victory for freedom of choice and family finances.  “Starting in July 2020, some drivers will be able to opt out of personal injury protection altogether, including seniors with retiree health coverage such as Medicare and those with health insurance policies that cover car accident-related injuries. Others will be able to continue with unlimited coverage or choose PIP limits of $250,000 or $500,000. A $50,000 option will be available for drivers on Medicaid.  A fee schedule will be established for medical providers, reining in runaway costs that result from medical care providers charging far more to treat car accident victims than other patients.  Non-driving factors such as zip codes, home ownership and educational level can’t be used to determine rates. Residents in Sanilac and St. Clair counties will not have to pay higher rates to subsidize drivers in other regions of the state.  An anti-fraud unit will help crack down on those abusing the system, which should help further lower car insurance rates.  “This reform plan is not perfect, but it is a huge step in the right direction after four decades of dealing with a broken car insurance system,” Hernandez said. “It proves that good things happen when we work together in the spirit of bipartisanship with the best interests of Michigan families at heart.”