Michigan’s Auto No-Fault System: Unsustainable Cost Growth Necessitates Reforms

Sharon Tennyson, Ph.D., Associate Professor at Cornell University testified before the Michigan House Insurance Committee on October 4, 2011 regarding Michigan’s no-fault insurance law. Tennyson noted that the current design of the no-fault system is the cause of the spiraling cost growth due to:

  • Unlimited lifetime benefits burden the auto insurance system with the highest-cost cases
  • Socialized insurance costs reduce private incentives to hold down costs
  • Lack of cost controls shifts costs onto auto insurance

Click here to read Tennyson’s full testimony.