Michigan Auto Insurance Rates Rise Despite 2019 Reform Claims

Recent discussions have emerged around Michigan’s 2019 auto no-fault law, with claims about its impacts on insurance rates and uninsured drivers being scrutinized. Although the Michigan Department of Insurance and Financial Services (DIFS) suggests that the reforms have reduced costs and lowered the number of uninsured drivers, the data paints a more complex picture.

Insurance Rate Trends

Contrary to claims by DIFS, a report by Milliman, a consulting firm, reveals that average auto insurance rates in Michigan have actually increased by nearly $200 from 2019 to 2024. The report, commissioned by the Michigan Legislature, contradicts the state’s assertion that drivers experienced cost savings. For further details, the full report can be accessed here.

DIFS had claimed in a December 2 press release that the reforms led to savings of $357 per vehicle due to reductions in Personal Injury Protection (PIP) premiums. However, these savings were counteracted by other rate increases, leading to higher overall premiums.

Uninsured Driver Statistics

Another point of contention is the number of uninsured drivers. Despite DIFS’s assertion that the uninsured rate has decreased, the Milliman report indicates an increase in uninsured drivers since the law’s implementation. The report highlights that what has decreased is the gap between Michigan’s uninsured rate and the national average.

Impact on Catastrophic Injury Care

The reforms also affected those with catastrophic injuries from car accidents, as significant cuts were made to the payments for care services. The report could not draw firm conclusions due to data limitations, but it estimated that nearly 3,949 crash victims annually might exhaust their medical coverage.

Tom Judd, head of the Michigan Brain Injury Provider Council, criticized the law, stating, “The no-fault law has created significant barriers to access to care for the most vulnerable and severely injured people.”

Overall, the findings suggest a need for careful reevaluation of the 2019 auto no-fault law’s impacts, as the anticipated benefits have not uniformly materialized across the board.