Auto Insurance Renewal Process

The new auto reform law in Michigan goes into effect July 1 and the fact is, many drivers may not see rate cuts that they were promised.

Keep in mind that the new auto insurance reform law, which goes into effect on July 1, 2020, allows motorists to opt-out of buying personal injury protection (PIP) as part of their required auto insurance as long as their health insurance covers auto injuries. In other words, motorists select the amount of medical coverage they want when purchasing their auto insurance.

This law has been branded as financial relief for Michigan drivers by reform proponents and was marketed as a way to reduce costs for Michiganders who pay some of the highest insurance rates in the nation.

Yet what was promised may in fact not happen. A Detroit Free Press article from late April suggested that some insurers may be relying on the cut to the $220 per-vehicle catastrophic claims fee to get to the state’s mandated price reduction level. That isn’t really cutting the insurance costs because the fee is not even relevant under the new law.

A more recent Free Press article in June indicated that some Detroiters might see an increase in their auto insurance rates, especially for drivers who purchase PIP coverage. The new law allows drivers with Medicare or a health insurance plan that covers auto accidents to opt-out of PIP. If you do choose to have it, lower amounts are possible. PIP often takes up close to or more than 50 percent of a driver’s premium bill.

Meanwhile one of the state’s leading hospital trade groups, the Michigan Health & Hospital Association, is urging vehicle owners to opt for the highest level of medical coverage under a revised no-fault auto insurance law that takes effect July 1. Again, this means higher premiums.

We wish that we had better news but this should not be a surprise to those who closely followed the auto reform debate in 2019. The team members here at Bashore Green will have difficult decisions to make when our auto insurance renews – just like you. So if you’ve been in an accident and want to know how auto reform impacts your ability to pay for healthcare costs, we can help. We’ll give you honest, straightforward answers and the most informed and timely advice in the industry.