Michigan Car Insurance Fee Falling To $100 A Vehicle In July

WWJ News
November 13, 2019 - 3:54 pm
Car key on money

LANSING (WWJ/AP) - Michigan drivers who want unlimited lifetime coverage for crash injuries will pay $100 per vehicle starting in July -- a reduction from record $220 they are assessed now.

The Michigan Catastrophic Claims Association announced the 55% fee cut Wednesday, months after the passage of a new law making the mandatory benefit optional beginning next summer.

“Today’s announcement by the MCCA that the per-vehicle fee is dramatically decreasing is just the first in what we hope is a series of cost savings for Michigan drivers,” said Tricia Kinley, executive director of the Insurance Alliance of Michigan, in a statement. “By next summer, drivers will finally be able to choose the level of medical coverage (see below) that works best for them, which should further decrease costs. The combination of new choices for consumers and the enactment of a fee schedule to stop medical providers from charging three and four times more for auto accident injuries should allow drivers to see savings on their premium.”

The state-created entity that reimburses insurers for claims surpassing $580,000 says those who buy less personal injury protection coverage will avoid the $100 fee altogether, unless the association is in a deficit position. 

This is part of Michigan’s new auto no-fault law, which took effect June 11, and includes several changes expected to reduce costs for drivers, including a fee schedule to rein in overcharging by medical providers and tiered choices in medical coverage.

Beginning July 1, 2020, drivers will be able to choose between several levels of medical coverage, including:

  • Unlimited lifetime medical benefits, which is required now
  • $500,000 in Personal Injury Protection (PIP)
  • $250,000 in PIP coverage
  • $50,000 in PIP coverage for those on Medicaid
  • Opt-out of PIP coverage entirely for those with Medicare or if you have separate health insurance that covers auto accident-related injuries

“Thanks to this dramatic fee decrease from the MCCA, Michigan drivers who have been clamoring for reform for years will finally start to see the relief they deserve,” Kinley said. “The latest reduction from the MCCA proves the legislation was definitely a positive step in the right direction. This announced decrease from the MCCA should send a signal to anyone looking to repeal these reforms that it would be a bad idea to do so, and the full reforms should be allowed to go into effect.”

Michigan currently has the highest average car insurance premiums in the country.