Auto No-Fault Reforms Continue to Move With Chamber Support

April 27, 2015

Legislation supported by the Michigan Chamber to reform Michigan’s no-fault automobile insurance system - and drive down premiums - moved through the House Insurance Committee last week, after passing the Senate earlier this month. 

Senate Bill 248 addresses many of the cost-drivers of Michigan’s no-fault system, while continuing to offer unlimited life-long medical benefits in exchange for strict limitations on the right to sue an at-fault party for non-economic damages (i.e., pain and suffering). 

The proposal limits the amount providers can recover from auto insurers for medical care. The Senate plan specified that providers would not be allowed to charge auto insurers more than they charge other insurers for similar services, excluding Medicare and Medicaid. The House changed this provision, specifying that providers would not be allowed to charge auto insurers more than 150 percent of Medicare reimbursement rates.  The House also added language requiring the rollback of auto insurance rates by $100 per vehicle for two years. 

Like the Senate version, the House version still phases out the current Michigan Catastrophic Claims Association (MCCA) and creates a new association. It also sets reasonable rules and rates for individuals providing attendant care and creates an Auto Insurance Fraud Authority. 

Most recent data from National Association of Insurance Commissioners (2008-2012) draws a stark contrast between Michigan and its surrounding states. The average auto insurance premium in Michigan is over $318 higher than Illinois, over $411 higher than Indiana, over $414 higher than Ohio, and over $450 higher than Wisconsin. Michigan ranked as the seventh highest state for premiums in 2012, with Detroit ranking as the most expensive city for auto insurance rates, making this a key general business and competitiveness issue for Michigan.

The Michigan Chamber supports SB 248 because we are confident that, if enacted into law, these changes will help make Michigan a more attractive place to write auto insurance which, in turn, will make rates more competitive and affordable for consumers, including job providers who purchase coverage for automobiles used in the course of business. 

We are encouraging the Michigan House to take prompt action and send a bill to the Governor’s desk. For more information, contact Wendy Block, Director of Health Policy & Human Resources, at or (517) 371-7678.