Michigan drivers likely to benefit from increased competition

LANSING – More than 50 auto insurance companies are choosing to do business in Michigan since changes to the state’s auto no-fault insurance were passed by a bipartisan group of lawmakers and the governor signed them into law in 2019.

The Insurance Alliance of Michigan today said the number of new businesses in the state creates greater competition to drive down costs.  

This follows news of the latest rankings out of Insure.com finding Michigan’s auto insurance rates continue to decline after being the highest in the nation for years. Last year, Michigan was ranked #2. Now Michigan ranks #4 behind Florida, Louisiana, and Delaware. The decline in the cost of Michigan’s auto insurance as compared to other states is attributed to the 2019 bi-partisan auto no-fault reform.    

“Since the implementation of the reasonable medical fee schedule as part of the 2019 bipartisan auto no-fault reforms, we’ve seen steady growth in the number of auto insurance companies wanting to conduct business in Michigan,” said IAM Executive Director Erin McDonough. “In addition to the largest refund in history with the $400 per-vehicle checks, Michigan drivers can put more money back into their pockets by shopping around. This is another example of how bipartisan auto no-fault reforms are working and should be allowed to continue to work.”

Additional benefits to the 2019 bipartisan auto no-fault reforms include: 

• More than 202,000 Michigan drivers without prior coverage have purchased auto insurance since reforms took effect on July 2, 2020, according to IAM member company data. Of those, 83,238 were Michigan drivers who didn’t have car insurance for three years or more.  
  
  
• Fee reductions by the Michigan Catastrophic Claims Association in 2020 and 2021 totaled more than $1 billion per year. Combined with the $400 per-vehicle refunds, there has been $5 billion-plus in estimated savings. This doesn’t take into account savings drivers may see by choosing different levels of Personal Injury Protection (PIP). Under the bipartisan auto no-fault reforms, insurance companies were required to reduce statewide average PIP medical premiums for eight years, which has contributed to the savings, according to the Michigan Department of Insurance and Financial Services.

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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.