Auto No-Fault Reforms Move Through the Senate With Chamber Support

April 20, 2015

Legislation to reform Michigan’s no-fault automobile insurance system passed the Michigan Senate last week by a vote of 21-17. 

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).  Specifically, SB 248 specifies that providers would not be allowed to charge auto insurers more than they charge other insurers for similar services, excluding Medicare and Medicaid. It also creates a new association for catastrophic claims, limits payments on 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 states 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 will encourage the Michigan House to take prompt action on this important issue. Please contact Wendy Block, Director of Health Policy & Human Resources, with any questions on this issue at (517) 371-7678.