Auto Insurance Reform Brings Savings Up To 53% In Personal Injury Protection Costs


(WWJ) Drivers should see savings in auto insurance premiums, per an announcement by Gov. Gretchen Whitmer and the Michigan Department of Insurance and Financial Services today that the average statewide Personal Injury Protection (PIP) medical savings under the state’s new auto insurance law will exceed the law’s requirements.

Under the new auto insurance law, Michigan drivers will now have a choice in the amount of PIP medical coverage they purchase on policies issued or renewed after July 1, 2020. 

New data shows that the average statewide PIP cost reductions are 15 percent for those who choose unlimited PIP, 30% for $500,000 in coverage, 41% for $250,000 and 53% for $50,000.

PIP medical coverage pays allowable expenses for medical care, recovery, rehabilitation, and some funeral expenses, and typically represents almost half of an individual driver’s premium. Michigan is the only state where unlimited PIP medical continues to be an option.

The new law also strengthens consumer protections and mandates statewide average savings for eight years.

“This is a time when Michiganders need to see rate relief, and I am pleased that these reforms will result in savings even greater than the law’s requirements,” said Gov. Whitmer. “It’s important that drivers talk to their insurance agents or attend upcoming town halls to make sure they understand the changes coming this summer so they can make the best choices for their families and budgets.”

Auto insurance premiums are individual to each consumer and may vary on driving record, miles driven, coverages selected, and other allowable factors.  

For the first time, DIFS contracted with outside independent actuaries to review all filed rates to confirm compliance with the law, and rejected any and all PIP filings that used any rating factors not permitted under the new law, such as sex, marital status, home ownership, or zip code, and required companies to resubmit filings with the prohibited factors removed. In total, DIFS approved 321 personal and commercial auto filings related to the law change.