It is Time: Governor Calls for No-Fault Reforms in SOS

Governor Snyder pushes for lower rates through comprehensive reforms

Lansing, Mich. – The Michigan Insurance Coalition agrees with Governor Rick Snyder that now is the time to reform Michigan’s no-fault insurance to make auto insurance affordable for all Michigan families.

In tonight’s State of the State address, Governor Snyder said, “We are the tenth most expensive state when it comes to no-fault insurance. We should reform no-fault. It is time to do that in a thoughtful way.” We couldn’t agree more.

“We are appreciative and encouraged that the Governor Recognizes that Michigan’s No-Fault system is a runaway train that needs reform now before it goes off the cliff and future generations of Michigan drivers are left holding the tab,” said Kurt Gallinger, Chair Of the Michigan Insurance Coalition. “Out of control costs and mounting unfunded liabilities of the current system are unsustainable. With a fair, reasonable cap on medical coverage, limiting reimbursement to medical providers to what they’ve agreed to accept from other private insurers, and a crack down on insurance fraud Michigan’s No‐Fault insurance system can be not only be saved but once again be affordable for the average family.”

  • Michigan is the only state in the nation mandating unlimited medical coverage (PIP) for auto accidents. The next highest state is New York at $50,000.
  • Skyrocketing reimbursement rates and trial lawyers looking for a big payday for themselves has driven up Michigan auto insurance rates twice as fast as other states and are 20 percent to 35 percent higher than our neighboring states.
  • The average No-Fault (PIP) claim has increased by 324 percent in the past 12 years increasing to $44,138 in 2012. The next highest state, New Jersey, averages $17,570.
  • The cost to drivers to pay the Michigan Catastrophic Claims Association (MCCA) fee has increased from $5.60 per vehicle in 1998 to $175 per vehicle in 2012 – a 3100 percent increase. Not withstanding, the MCCA has a $60 billion unfunded liability.
  • Medical providers routinely charge patients covered by no-fault 300 – 400 percent more than patients covered by other private insurance for the same procedure.
  • 20 percent of Michigan drivers are driving uninsured.