Michigan House Panel OKs Auto Insurance Changes

LANSING (WWJ/AP) - A Republican-led state House committee has approved a proposal that would change Michigan's auto insurance coverage requirements for people injured in accidents.

The House Insurance Committee approved the measure Thursday mostly along party lines, setting up the measure for a vote on the House floor.

Michigan now is the only state in the nation that mandates uncapped medical benefit coverage for people seriously injured in auto accidents. The new proposals instead would offer motorists less expensive insurance in exchange for limited personal injury protection coverage.

Supporters, State Representative Pete Lund of Shelby Township, say motorists should have options for coverage.

"People who already are in accidents and already are covered, they will not be affected by the cap. The cap will still be lifted for them and they will have unlimited coverage forever," Lund explained. "But the other people, the win is for the people, they'd be able to choose their level they want for coverage and that should amount to savings for them," he said.

The new proposal would offer a range of coverage options from $500,000 to $5 million.

Opponents say motorists opting for less coverage could wind up underinsured and in financial trouble if they're seriously injured in an accident.

Lund said that shouldn't be a problem for most people.

"They may have it [coverage] through their health insurance. Senior citizens could get it already from Medicare. There are some cases where people may be forced to Medicade to cover it," said Lund.

"But, with people who get in accidents who actually have medical claims, if you take some of the higher coverage options, that should cover over 99 percent of the people who ever even have to file a claim in an auto insurance accident," he said.

The two-bill package was the subject of hearings last week in the state capitol, which included some emotional testimony.

The Associated Press contributed to this report.