Auto No-Fault Reforms Stalled in the State House

May 11, 2015

Legislation supported by the Michigan Chamber to reform Michigan’s no-fault automobile insurance system – and reduce premiums – has come to a halt on the floor of the Michigan House of Representatives due to concerns raised by hospitals, attorneys and auto accident victims.

Senate Bill 248, supported by the Michigan Chamber and passed by the Senate last month, 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). 

SB 248, sponsored by Sen. Joe Hune (R-Hamburg), limits the amount providers can recover from auto insurers for medical care to no more than 150 percent of Medicare reimbursement rates, 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, creates an Auto Insurance Fraud Authority and requires auto insurance rates to be rolled back by $100 per vehicle for two years.

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 remains hopeful that a compromise can be reached on SB 248, a solution that 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.

For more information, contact Wendy Block, Director of Health Policy & Human Resources, at or (517) 371-7678.