CBS Detroit – Michigan’s main insurance regulator is raising concerns after auto insurance companies are telling customers the wrong information regarding the recent insurance reforms to Michigan’s old no-fault law. Many people are being told they cannot make changes to their policy until their policy is up for renewal. This means many Michiganders are being told they have to wait months before they can make changes to their policies.

In an article by the Free press, Anita Fox, who is the director of the Department of Insurance and Financial Services (DIFS), says what people are being told is false, and maybe in violation of the law. In a bulletin that was released, Fox said this was improper behavior. Insurance companies in the State of Michigan must give the option to modify an existing policy, OR give the consumer the option of canceling their policy and reissuing a new one to reflect the changes they desire.

Credit: CBS Detroit | Charles Forbes – File photo M-10 Lodge Freeway

The option of changing one’s policy before renewal is called a “midterm endorsement”. However, not all companies allow this. For this reason, all consumers have the right to cancel their policy at any time and get a new one or change insurance carriers altogether.  If you cancel your policy, you are also entitled to a refund of excess paid premiums.

According to DIFS, auto insurance carriers who do not offer one of these options to Michigan consumers are in violation of the law. Insurance companies who fail to offer one of these options could face fines or have their license taken away.

The Michigan Insurance Department has a hotline to answer questions or file complaints at: 833-ASK-DIFS. With Michigan’s new insurance reform, drivers are given a choice on the level of personal injury protection or PIP coverage they wish to pay for. With the old no-fault law, drivers had unlimited coverage. Which was unique to Michigan, and made premiums here – particularly in Detroit – some of the nation’s highest.

Now that consumers can tailor their coverage to their circumstances, such as if an employer’s health insurance plan or Medicare will cover car accidents, it gives policy options to people that can offer significant savings to their auto insurance premiums.

With these sweeping changes, DIFS recommends Michigan drivers review their policies and shop around for the best rates.

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Charlie Forbes