2017-08-10 / News

State’s no-fault law at fault for rising costs

LANSING – A new report by Insure.com found that the requirement that all Michigan drivers purchase unlimited, lifetime medical benefits under the state’s broken, outdated auto no-fault law was the number one reason Michigan topped its list of most expensive states for auto insurance.

“We’ve known for a long time that Michigan’s broken auto no-fault system that hasn’t seen any updates or changes in more than 40 years is to blame for drivers’ skyrocketing premiums, and now is the time to make meaningful reforms that will bring much-needed relief to all Michigan drivers,” said Dyck Van Koevering, general counsel for the Insurance Alliance of Michigan.

The report also found that Michigan’s one-ofa kind insurance law causes more uninsured drivers on the road, leading to higher costs.

In June, IAM released the findings of a poll conducted by Washington D.C.–based Greenberg Quinlan Rosner Research. More than 70 percent of Michigan voters say it’s time to reform Michigan’s broken, outdated auto no-fault law, according to the results of the poll. Respondents to the poll overwhelmingly supported cracking down on fraud and abuse, and creating a fee schedule for what hospitals can charge auto insurance companies for medical procedures.

The IAM has called upon leaders in both parties to make three common-sense reforms to fix Michigan’s broken system:

• Crack down on fraud by creating a fraud authority to significantly reduce insurance fraud and scams, which cost the average Michigan family hundreds of dollars a year in additional premiums.

• Stop medical overcharging and the gouging of consumers by enacting a medical fee schedule. Many experts agree that the workers’ compensation fee schedule is an effective model for reining in insurance costs.

• Drive down costs by giving consumers a choice of different levels of medical benefits – much like a cell phone plan or cable TV subscription – so they can have the flexibility to choose what works best for them and their family.

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