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House and Senate Pass No-Fault Reforms

May 10, 2019

Michigan’s current auto insurance system would be drastically changed under legislation passed by the House and Senate this week. Though each chamber voted on their own version of the bill, which includes differences that will need to be negotiated, both versions end the current no-fault auto insurance system as we know it today.

The House’s bill would make the following reforms:

    • Provides various levels of Personal Injury Protection (PIP) for drivers to choose from.
    • Allows seniors with retiree health coverage such as Medicare, and those with health insurance policies that cover car accident-related injuries, to opt out of PIP coverage.
    • Establishes fee schedules for what healthcare providers would be paid by insurers.
    • Creates a fraud task force.
    • Provides financial oversight of the Michigan Catastrophic Claims Association.

The Senate legislation would make the following reforms:

    • Require auto insurers to offer at least three new PIP coverage options.
    • Allow drivers with qualified medical coverage (health insurance, Medicare, etc.) to opt out of PIP coverage.
    • Reduce the announced $220 annual Michigan Catastrophic Claims Association fee by 80%.
    • Bring cost parity to the higher amount auto insurers pay to hospitals and other health care providers with the amount other insurers pay for the same care.
    • Reduce the system’s susceptibility to lawsuits.

The House bill has been referred to the Senate Committee of the Whole for consideration. While the Senate bill was referred to the House Select Committee on Reducing Car Insurance Rates for consideration. “Following the passage of both bills, Governor Gretchen Whitmer announced she intends to veto the bills in their current form once they make it to her desk. The next few weeks will be very telling on whether the Governor and Legislature are able to find a compromise or go back to the drawing board on a new proposal,” explained Brendan Ringlever of MLC.

Michigan Legislative Consultants is a bipartisan lobbying firm based in Lansing, Michigan. Our team of lobbyists and procurement specialists provide a wide range of services for some of the most respected companies in America. For more on MLC, visit www.mlcmi.com or connect with us on LinkedIn and Twitter.