Seven things to know about changes to Michigan's mandatory auto insurance
The Michigan House of Representatives is expected to bring HB 4936 to the floor for a vote soon.
That legislation would significantly change Michigan’s auto no-fault Personal Injury Protection (PIP) coverage.
Here is a quick overview of what we have now, the proposed changes, and the potential consequences of those changes.
1. What we have now
There’s some confusion about changing no-fault. It’s not the “no-fault” part that would change. It’s the Personal Injury Protection portion of auto insurance that would change.
The state mandates a minimum of $500,000 in Personal Injury Protection and an annual fee to the Michigan Catastrophic Claims Association (MCCA) for each vehicle policy.
That MCCA fee varies from year to year. This year, the fee amounted to $145. That buys you coverage for any reasonable and necessary care if the cost of your injuries exceeds that $500,000. In other words, if you're in a horrible accident with disabling injuries, you're covered.
It will pay all of your medical costs.
It will pay up to 85% of the income you would have earned if you had not been hurt for up to three years- with some limits.
If you need physical therapy or other kinds of therapy, such as help with your speech, or re-learning tasks, or how to hold a job, you’ll get help as long as necessary.
It’s lifetime, unlimited coverage.
The Michigan Catastrophic Claims Association coverage is considered to be the best in the nation.
2. Changes under the legislation
HB 4936 would give auto-owners the choice to purchase Personal Injury Protection at three levels:
· $500,000,
· $1 million,
· or $5 million.
If the cost of care exceeds the amount of coverage you buy, you are on your own.
The legislation would also implement a medical fee schedule which would restrict the amount of money paid for medical procedures. Rather than paying the ‘retail’ costs of medical care, a medical fee schedule would cap prices, generally at lower rates.
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Reducing the Expense of Michigan Auto Insurance – Insurance ...
No Fault automobile insurance is mandatory in the Wolverine State, but unfortunately for residents it can become very expensive depending on the area in which they reside. Specific areas of the state have some of the highest premiums within the country and numerous individuals have seen their rates gradually increase recently; this is mostly within the southern portion of the state and especially in the city of Detroit. Rates in this region are well above the national average and due to the economic struggles that have recently taken place in MI, many motorists are in want of finding the lowest possible prices for policies.
A good place to start in order for residents to reduce the expense of Michigan car insurance coverage is to begin comparing quotes from different companies; as mentioned, some insurers have begun to gradually increase premiums and those who have seen their premiums rise should compare quotations from other carriers to make sure that they are paying the most affordable rate obtainable. If an individual is shopping for a new policy then it’s an absolute must to complete a quote comparison from as numerous companies as possible; you can find several providers within the state and the only strategy to find the cheapest one is to seek them out and get quotations to compare from.
Additional Ways to Reduce MI Auto Insurance Rates
Consumers looking to find lower premiums should become knowledgeable about auto insurance and how rates are affected and why it truly is important to shop around. First of all, according to the Michigan Department of Energy, Labor and Economic Growth you will find approximately 65 licensed insurers within the state and each 1 is competing against each other in order to acquire new business; with competition comes the chance of finding an insurer with cheaper rates. Although carriers determine their own rates, they are regulated by the state law which prevents for premiums from becoming excessively high and insurers are prohibited from communicating with one another in regards to the rates that they are setting. Therefore, each company will have a different pricing schedule which makes comparison shopping that much more important.