Trend of selecting lower thresholds for Personal Injury Protection (PIP) coverage is likely to continue as drivers learn more about their options
LANSING – A growing number of Michigan drivers are now choosing lower thresholds of Personal Injury Protection (PIP) coverage as a result of the 2019 bipartisan auto no-fault reforms, allowing them to save money on top of the $400 per-vehicle refunds, the Insurance Alliance of Michigan (IAM) said today.
According to IAM member company data, in December 2021, nearly one in four Michigan drivers chose a level of medical coverage less than unlimited that they feel fits their needs. Over the prior year, that number has grown from 15% to approximately 25%. Insurers representing nearly 88% of the auto insurance market in Michigan responded to this survey.
Before auto no-fault reforms, all Michigan drivers were forced to purchase unlimited, lifetime medical benefits with their auto insurance. This expensive mandate, coupled with unchecked medical expenses and rampant fraud, caused Michigan’s auto insurance premiums to climb to the highest in the country. Now, drivers can choose from several different levels of medical coverage, many of which can reduce their auto insurance premiums. Even motorists who choose to keep unlimited, lifetime medical benefits are saving money on their auto insurance premiums, according to the Michigan Department of Insurance and Financial Services.
“With costs going up for Michigan families and small businesses, bipartisan auto no-fault reforms are helping motorists save money by giving them choice in finding the coverage that best suits them and their budgets,” said IAM Executive Director Erin McDonough. “More Michigan drivers can now afford auto insurance than ever before, and they are receiving $400-per-vehicle refunds because of bi-partisan auto no-fault reforms. These reforms are providing real savings for Michigan families and real opportunities – and we should keep these important reforms in place despite attempts by special interests seeking to turn back the clock.”
IAM data shows that between Sept. 1, 2021, through Dec. 31, 2021, 63.5% of motorists continued to choose unlimited PIP coverage, down from 71.9% in December 2020. That trend has continued quarter after quarter showing that, as Michiganders become more comfortable with the 2019 reform, they feel more comfortable making choices other than unlimited. Michigan is currently the only state that still offers an unlimited PIP benefit, with the next highest being New York at $50,000 in PIP benefits.
“The 2019 reform was the first major change to our state’s auto insurance system in 40 years. It takes time for people to become comfortable making change and staying the course on auto no-fault reform keeps our program stable and options open for Michiganders to save money,” McDonough added.
According to new IAM member company data, 202,923 Michigan drivers have purchased auto insurance since reforms took effect on July 2, 2020. Of those, 83,238 were Michigan drivers who didn’t have car insurance for three years or more. Additionally, 37 new companies have entered the Michigan market, creating greater competition and driving down costs.
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IAM is a government affairs and public information association that represents auto, home and business insurance companies and related organizations operating in Michigan. Learn more about IAM and its members on Facebook, Twitter or at www.insurancealliancemichigan.org.
