LANSING (WWJ) – The Michigan Chamber of Commerce released a study showing significant reforms are needed to protect Michigan’s valued no-fault automobile insurance system from collapse and keep premiums competitive with other states.

The Chamber-sponsored study determined that no-fault reforms are needed to prevent a cost crisis that could destroy Michigan’s no-fault system.

The study identified four primary recommendations for reform:

  1. Place upper limits on no-fault benefits
  2. Allow consumers to choose the level of benefits they receive
  3. Enact cost controls for medical and long-term care through a fee schedule similar to that used for systems such as worker’s compensation
  4. Introduce a coordinated response to claims fraud.

Rich Studley, Michigan Chamber President and CEO, said the challenge is Michigan’s current auto no-fault system.

“(It’s) by far the most generous of all 50 states. This doesn’t translate into good news for Michigan citizens or job providers purchasing insurance for commercial fleets of vehicles,” Studley said in a release.

Premiums in Michigan rose by 30.5 percent over the last decade, compared to 13.7 percent nationwide. Studley said this trend line puts Michigan at a competitive disadvantage.

One of the key reforms the study explored was providing drivers with coverage choice. Today, drivers are forced to pay among the highest auto insurance premiums in the nation in exchange for unlimited medical coverage they may neither want nor need.

Wendy Block, Director of Health Policy & Human Resources for the Michigan Chamber, said Michigan is the only state in the nation with a government mandate to purchase unlimited benefits.

“The current system forces Michigan drivers to pay among the highest premiums in the nation and, in many cases, for a level of coverage that’s higher than they can afford. Allowing coverage choice is good for Michigan drivers and for Michigan job providers,” she said in a release.

Comments (5)
  1. Bob says:

    30% increase over the past decade, how about some figures on net profit these companies make. Mandated coverage by law has always resulted in exceptional profits for companies, big surprise the consumer pays more and more to increase profits more and more.

  2. Lucy says:

    Medical coverage is a small percent of the inflated premiums insurance companies charge on millions of policies.In addition to charging high premiums, they now want to take significant coverage away. It is all about money for the insurance companies.Does anybody truly think rates will go down after a year or two? They will go right back up with very limited coverage left.

  3. marie says:

    I agree, the arguments that michganders are paying for coverage they don’t need is ridiculous. No one ever wants to have to need this coverage because it would mean they or their spouse or child would have been seriously injured in an MVA. And how are they to know what they would need if this were to happen. If that did happen they would want and NEED the coverage that is available now. Testimony represented by insurance companies stated there was no way to predict what factors might drive up rates in the future. Yes that’s after they limit our benefits. What small savings we MIGHT see will go away quickly. Bank on it!!! This is all about raisiing profits for insurance companies, should be quite obvious.

  4. Dan Tyler says:

    To those who would change auto no fault, nobody supporting this change is

    providing any solid data proving auto insurance rates would go down, or even

    offer a guarantee. The legislature voted against opening the Michigan

    Catastrophic Claims Association (MCCA) books a short time ago. Now we see

    a sudden and urgent campaign to hide the matter from further scrutiny. This

    does not pass the smell test. I suggest you find somebody in your community

    paralyzed from the neck down after an auto accident like me and read your

    editorial to them face to face. And then bid them farewell to a life of

    misery in a nursing home for life. They could be older like me or a child

    and not able to defend themselves from this clearly immoral act you try to

    justify. I have worked 27 years as a tax payer in this condition due to MCCA

    support and your brilliant idea will take away my care givers, put me in a

    nursing home and shift the obligation of the insurance I paid for to state

    taxpayers. You fool nobody.

  5. short term car insurance says:

    Having read this I believed it was very informative. I appreciate you taking the time and energy to put this article together. I once again find myself spending a lot of time both reading and posting comments. But so what, it was still worth it!

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