Driver Savings Announced With Auto Insurance Reform

LANSING, Mich. (WILX) – Governor Gretchen Whitmer on Tuesday announced that drivers should expect lower costs and more savings for their auto insurance policies compared to the previous year.

As part of the governor’s new auto insurance reform, drivers are expected to achieve even greater savings on the PIP medical portion of their policies, averaging 25-62% depending on the coverage options they have. they choose this year. Governor Whitmer is also reminding drivers who have let their auto insurance expire that time is running out to take advantage of purchasing penalty-free insurance before the January 1, 2022 deadline.

Michigan’s new auto insurance law has been in effect for over a year, and the state continues to promote consumer protection, help families access care, and review rates filed by auto insurers . Aggregate data from rate deposits approved under the new law shows that statewide average medical reductions in personal injury protection (PIP) exceeded legal requirements in 2020, and these savings have increased. further increased in 2021, even when the rates are adjusted for the mandatory increase in bodily injury. (BI) level of coverage.

PIP limit Medical PIP Mandate
Discount (compared to statewide average rate as of May 1, 2019)
2020 State-wide average reduction * (as of July 2, 2020) 2021 Statewide average reduction * (as of July 2, 2021)
Unlimited At least -10% -15% -25%
$ 500,000 At least -20% -31% -39%
$ 250,000 At least -35% -42% -48%
$ 50,000 At least -45% -53% -62%

* These savings represent the average reduction statewide. The savings to individual consumers may be different depending on their choice of coverage and factors related to their personal circumstances, such as driving record and claims history.

“Michigan drivers have been calling for relief from high auto insurance rates for decades, and I’m glad this bipartisan legislation has saved money, increased consumer protection and offered more choice to consumers. consumers than ever before, ”Governor Whitmer said. “Drivers can choose the level of coverage that best fits their family’s needs and budget, and even those who want to maintain unlimited coverage, which offers the country’s most generous benefits, continue to save money. . “

In addition to the reductions listed above, Michigan has seen:

  • Auto insurance savings are estimated at $ 1 billion in the Michiganders’ pockets;
  • The Zebra reported that Michigan rates fell 18% in 2020, while the national average reduction due to COVID-19 was only 4%.
  • A 27% reduction in rates across the market, according to Insure.com, meaning Michigan is no longer the most expensive state for auto insurance;
  • Increased market competition, with 36 new companies or affiliates entering the Michigan auto insurance market to date;
  • A 61% decrease in the Michigan Catastrophic Claims Association’s annual valuation, with the preparation of valuation surplus refunds; and
  • More than 66,000 previously uninsured Michiganders have purchased auto insurance at no cost or penalty as part of the statutory amnesty period.

These lower premiums will save drivers more money on top of the expected refund that will be distributed following a unanimous vote by the Michigan Catastrophic Claims Association (MCCA) to accede to the governor’s request to hand over checks. reimbursement to all Michiganders with auto insurance.

“One of the most important protections for consumers is the Amnesty Period for Uninsured Drivers, which helps drivers who have let their insurance expire buy insurance without paying a penalty or premium increase – but they must apply by Jan. 1, 2022, “the Michigan Department of Insurance said. and Chief Financial Officer (DIFS) Anita Fox. “As of January 1, drivers may again be assessed a penalty or increased premium after a break in coverage, so we strongly encourage all uninsured drivers to contact an agent or insurer today to do so. a demand. “

In 2020, Michigan drivers saw the nation’s largest rate reduction, with an 18% drop in rates, compared to the national average reduction of just 4%.

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About Natalee Broderick

Natalee Broderick

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