Watch CBS News

Study: Reforms Essential To Protect Mich. No-Fault Insurance

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.

View CBS News In
CBS News App Open
Chrome Safari Continue
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.