Whitmer Signs Auto Insurance Reform Bill At Mackinac Policy Conference

May 30, 2019 - 10:00 am

MACKINAC ISLAND (WWJ) - Governor Gretchen Whitmer has signed the no-fault auto insurance reform legislation Thursday that affects every driver in Michigan.

Supporters say the legislation, which passed with bipartisan support, will lower insurance bills by anywhere from a few hundred dollars for drivers in the suburbs to more than $1,000 for Detroiters.

The bill will be filed next week with the Office of the Great Seal and will take effect at that time. 

Speaking live on WWJ from the Mackinac Policy Conference, Whitmer says the cooperation in Lansing is a stark difference from what is seen in the nation's Capitol.

"When we focus on these fundamentals, I think we can find common ground. There's so much ideology and dysfunction in Washington D.C. and I am determined not to let that divided government paralyze us in Michigan, but to make it incredibly productive," she said.

The legislation guarantees rate reductions and offers choice among personal injury protection, or PIP, levels. PIP, on average, makes up half of car premiums. The measure also prohibits the use of several non-driving factors in setting rates and scale back reimbursements for health providers that treat accident victims to 190% to 230% of what Medicare pays. Unlike several other no-fault insurance states, Michigan does not have a fee schedule for care covered by auto insurers. They pay much more for the same services than is paid by employer plans or government insurance such as Medicare or Medicaid.

A driver choosing to stick with unlimited coverage would see a 10% PIP reduction. Someone who fully opted out would get a 100% cut, if they have health insurance, and potentially also avoid paying much of a $220 annual per-vehicle fee that reimburses car insurers when severely injured motorists' expenses exceed a certain amount.

People on Medicaid would have to get at least $50,000 in benefits and would pay 45% less. People picking one of two other options — $250,000 or $500,000 of coverage — would see a 35% or 20% reduction.

The rollback in PIP rates would start in July 2020 and last for eight years. It could amount to $120 to $1,200 in savings for someone paying $2,400 annually per car, assuming the PIP fee accounts for half their bill, according to GOP projections.

Now that auto insurance reform has been solved in Lansing, lawmakers will start to look at funding to fix Michigan's crumbling roads. Whitmer has proposed a 45-cent per gallon gas tax, which many are not thrilled about. She says it's about a long-term solution.

"It's going to take a while, let me tell you. This is a 10 year project at this level to get to 90% of our roads in good to fair condition, but every year we don't do it the cost goes up and the danger gets more serious," she said.

While Republicans in the Legislature say they won't include her tax hike in their budget, Whitmer says she's willing to hear other options.

"If we're serious about fixing this, we've got to get to $2.5 billion. Now, there might be an easier way to do that and if the Legislature has that idea I'd love to hear it," she said. "But so far, it's been crickets because this is a tough problem to solve and we need a real solution and sticking our head in the sand is not acceptable."