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Drivers can tap into savings from Michigan’s new auto no-fault law beginning today

For years, Michigan drivers have been paying the highest auto insurance premiums in the country. Today, a new law takes effect reforming Michigan’s broken, outdated auto no-fault system and lowering costs for drivers across the state.

“For the first time in nearly 50 years, Michigan drivers will have a choice in the level of medical coverage included with their car insurance, which is leading to lower car insurance premiums across the state ,” said Erin McDonough, executive director of the Insurance Alliance of Michigan. “While it’s impossible to predict what one person’s premium may be because each policy is based on an individual’s circumstance, we are hearing from drivers in Detroit to northern Michigan and the Upper Peninsula who have all been able to save hundreds if not thousands of dollars on their auto insurance premiums under the new law — including those who are choosing to keep unlimited, lifetime medical benefits.”

The historic auto no-fault reform package passed by the Legislature last year — while not perfect — made great strides in cracking down on fraud and abuse, reining in overcharging and gouging by medical providers and giving consumers a choice in the level of medical coverage included with their car insurance policy.

Also, under the new law the 20% of Michiganders who are currently driving without insurance will be able to get coverage without facing a penalty.

“Insurance Alliance of Michigan member companies are committed to doing their part to educate our customers about the upcoming changes to Michigan’s auto no-fault law and helping drivers find the right plan for them and their family,” McDonough said. “We encourage Michiganders to reach out to their insurance company or independent agent to explore what options are available under the new law so they can select a plan that works for their budget.”

For nearly 50 years, drivers have been forced to purchase unlimited, lifetime medical benefits and medical providers were allowed to charge outrageously high rates, both of which drove up the cost of auto insurance in Michigan to the most expensive in the country. Michigan was the only state in the country to place such an expensive mandate on its drivers.

Beginning July 2, drivers will be able to choose between several levels of medical coverage, including:

  • Unlimited lifetime medical benefits, which is required now

  • $500,000 in Personal Injury Protection (PIP)

  • $250,000 in PIP coverage

  • $50,000 in PIP coverage for those on Medicaid

  • Opt-out of PIP coverage entirely for those with Medicare or if you have separate health

  • insurance that covers auto accident-related injuries

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