Commentary: Auto no-fault reforms working for Michigan consumers, businesses

Commentary: Auto no-fault reforms working for Michigan consumers, businesses

After five decades of paying the highest auto insurance rates in the nation, Michiganders and businesses are finally seeing relief.

The bipartisan reform legislation negotiated by the Legislature and governor are saving drivers money. Now is not the time to turn back the clock on these cost-saving measures.

Prior to the reforms, Michigan’s auto insurance system was broken and costly. Not only did it encourage massive overcharging by certain medical providers, it also contained a provision wholly unique to Michigan that required drivers to purchase unlimited, lifetime medical benefits with their auto insurance policy. All of this added up to exorbitant auto insurance premiums for drivers, as well as far too many uninsured drivers who chose to take their chances if they simply couldn’t afford the coverage.

The 2019 reforms are working. They are reining in overcharging and giving drivers a choice in the type of medical coverage they purchase as part of their auto insurance policy.

Starting last week, more than seven million Michigan insured drivers are slated to start receiving $400-per-vehicle refunds either directly deposited or with a check coming in the mail. Auto insurance companies have 60 days to disburse this money to Michigan drivers, including businesses that deploy commercial and fleet vehicles. This will help many Michiganders, along with many small businesses at a time when other costs are rising fast and the economy is getting back on its feet.

The $400-per-vehicle refund equals to $3 billion in savings going back to Michigan consumers’ and business’ pockets and comes on top of the $1 billion in savings from previous fee reductions by the Michigan Catastrophic Claims Association.

Because of these bipartisan reforms, more insurers have also entered the marketplace to offer auto insurance coverage in Michigan, providing more choice and options while helping drive costs down due to the increased competition.

Michigan is no longer the most expensive state in the nation to carry auto insurance and drivers are saving money, even for those choosing to stay with unlimited medical coverage, according to the latest data from the Michigan Department of Financial and Insurance Services.

At the same time, it’s important that individuals needing care and coverage get it. That’s what DIFS is working hard to do. The department is playing a crucial role in the implementation of Michigan’s auto insurance reforms. They are addressing complaints through a hotline (833-ASK-DIFS) for individuals facing care retention issues or worried about impact to their care.

DIFS is also administering a process called utilization review, which uses third-party, independent experts to resolve disputes arising between Michigan drivers, medical providers and their insurance companies. This is noteworthy because previous to the bipartisan reforms, there was often no other recourse for dispute resolution other than going to court and the vast time and expense that took.

The reforms are working. The coming $400-per-vehicle refunds are tangible proof of that. So are the premium savings drivers have started seeing and the growing number of insured drivers.

The Legislature must stay the course to ensure these savings remain in the pockets of Michigan drivers and businesses.

Wendy Block is vice president of Business Advocacy and Member Engagement for the Michigan Chamber of Commerce.

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