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Michigan drivers have saved over $6.5B from auto no-fault reforms

DIFS report: 2019 auto no-fault reforms are bringing down costs, reducing fraud and abuse


LANSING – Michigan drivers are continuing to benefit from the 2019 bipartisan auto no-fault reforms and have saved more than $6.5 billion compared to the outdated, failed system years ago.


According to a new independent report by the Michigan Department of Insurance and Financial Services (DIFS) recently presented to the Legislature, the rate filings insurers submitted in 2023 accounted for $186.3 million in savings that was passed on to Michigan drivers in the past year. In addition, drivers have saved $106 million from previous rate filings and approximately $6 billion in reductions to the fee assessed by the Michigan Catastrophic Claims Association (MCCA).


“This independent analysis shows without a doubt that auto no-fault reforms are working to curb costs for Michigan drivers at a time when the high cost of everything continues to be a burden,” said Erin McDonough, executive director of the Insurance Alliance of Michigan (IAM). “Reforms have also led to more than 70 new insurance companies filing for licensure to sell insurance in our great state, which increases competition and helps to further reduce costs. We simply can’t afford to return to the old broken system with astronomical rates, rampant fraud and widespread abuse and overcharging. States like Florida, California and Louisiana are going backward, and drivers in those states are seeing affordability and the availability of insurance coverage actually decline. We urge Michigan policymakers to heed these cautionary tales in other states, push back on special interests trying to turn back the clock and allow these bipartisan reforms to keep working.


Prior to the 2019 auto no-fault reforms, the costs to Michigan drivers due to the MCCA fee and personal injury protection (PIP) coverage accounted for nearly half of the cost of an average insurance policy, making purchasing insurance cost prohibitive to many. People also had no choice other than unlimited PIP regardless of whether they could afford it. The reforms provided choice in PIP coverage for the first time and mandated reductions in rates charged for PIP coverage by insurers. 


A recent report from Insurify shows Michigan moved from the most expensive state in the nation for auto insurance, down to ninth, despite having the highest required benefits. 


And more than 200,000 previously uninsured drivers have now purchased auto insurance since the 2019 reforms, a testament to the rising affordability and accessibility brought about by reforms. 


“The cost of uninsured drivers are borne by individuals paying for insurance,” McDonough said. “As lawmakers look at potential changes to the law in the New Year, we urge them to dismiss those that would increase the cost of auto insurance at a time when Michigan drivers can least afford it.” 


The DIFS analysis also found the process for Michigan drivers, medical providers and insurance companies to resolve disputes – called utilization review, coupled with a reasonable medical fee schedule – has addressed and cleared more than 2,100 cases, which shows the accountability process is fair, impartial and functioning as intended by lawmakers. Utilization review helps reduce legal costs by having DIFS use third-party, independent experts, such as board-certified chiropractors and therapists, to review each case. 

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