Michigan Governor Unveils Auto Insurance Plan

April 18, 2013

Michigan Gov. Rick Snyder and Republican lawmakers have unveiled a proposal to end unlimited lifetime coverage for medical expenses tied to auto accidents.

Drivers now pay $175 per car per year to cover catastrophic injuries, and the fee is rising to $186 this summer.

The insurance lobby and other critics say Michigan’s unique requirement for unlimited medical coverage is too expensive. Hospitals and others say it should stay intact.

The governor’s office announced that Snyder joined State Sen. Joe Hune, State Rep. Pete Lund and business leaders on April 18 to announce a plan for no-fault auto insurance reform aimed at lowering the cost of insurance for Michigan drivers and sustaining the system into the future.

The plan calls for an end to the requirement that consumers purchase unlimited lifetime medical coverage, according to the governor’s announcement.

Michigan’s mandatory coverage for catastrophic accident victims would continue to be the best in the nation, the announcement said. It would provide $1 million in coverage and is estimated to lower insurance premiums by $250/year for the average Michigan family.

Past attempts to limit medical coverage have stalled in the Legislature. Snyder made the issue a priority in his January State of the State address, giving hope to proponents of changing the system.

The average auto insurance medical claim in Michigan is more than $45,000, twice as high as the next closest no-fault state, the governor’s office said. The result is costlier premiums for consumers.

The plan also calls for the establishment of a fraud authority funded by insurance providers to combat insurance fraud.

Auto insurance premiums in three Michigan cities are among the top ten highest in the nation and the rate of uninsured in urban areas is estimated as high as 50 percent, according to the announcement. Companion legislation proposed by Sen. Virgil Smith would establish a pilot program for eligible low-income Michigan drivers to purchase a low cost policy. The program would allow medical coverage to be purchased at $50,000 to lower the cost even further.

The Michigan Catastrophic Claims Association (MCCA) would be phased out and replaced by a non-profit entity that would be subject to full transparency. The existing MCCA will continue to ensure that all current accident victims receive unlimited, lifetime benefits from their insurance company.

Legislation is expected to be introduced in the next week, the governor’s office said.

Sources: Michigan Governor’s Office, Associated Press

Latest Comments

  • February 14, 2016 at 9:58 am
    Say What? says:
    A car make a left turn in front of him and totaled his car. The EMT told him he needed to go to the emergency room to have his back and head checked out since his head smashed... read more
  • May 7, 2013 at 3:59 am
    hellomichigan says:
    If you want to call in surviving. Do you know how fast 1 million dollars goes when you are talking life altering injury like parapalegic? With kneck and spine surgery and exte... read more
  • May 7, 2013 at 3:46 am
    hellomichigan says:
    Ok so is there a limit on paying in on insurance without making a claim? Can we get free insurance after we pay in X amount of dollars. Why should the insurance company get to... read more
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