New Car Insurance Laws in Michigan May Lower Premiums
Lisa Steuer McArdle
Oct 14, 2021 · 3 min read
According to Forbes, Michigan drivers pay some of the highest car insurance rates in the U.S. Michigan’s new car insurance laws are intended to help reduce costs. The changes that just went into effect are part two of a car insurance overhaul plan that was signed into law in the spring of 2019.
What changes have Michigan already made to no-fault car insurance?
The first part of the law went into effect last July. Before the changes last year, Michigan drivers were required to have unlimited lifetime medical benefits for personal injury protection. This covers your medical expenses from your car accident for life no matter who caused the car accident.
Personal injury protection also covers other expenses for up to three years after the accident, such as lost wages if you are unable to work. With the car insurance changes implemented last year, for the first time, Michigan drivers could choose the amount of no-fault medical coverage to buy with their car insurance.
How does cutting prices impact care facilities?
A new change implemented earlier this month requires rehab clinics and other medical care providers who treat crash victims with no-fault insurance to cut some of their prices by 45%.
As part of the reform package, a new fee schedule only covers rehab services that have been assigned codes by the U.S. Centers for Medicare and Medicaid Services. Those fees are generally covered by Medicare in hospitals. So that means the biggest impact will be on specialized rehabilitation programs, which often do not take place in hospitals.
This is reportedly one of the most controversial parts of the changes to car insurance law in Michigan. These price cuts will affect more than 6,600 auto accident victims who are receiving long-term care and rehabilitation, according to the Detroit Free Press.
The victims’ care is paid for by the Michigan Catastrophic Claims Association through the per-vehicle annual fee that all Michigan drivers were assessed for.
Some care providers are concerned that 45% price cuts mean they’ll have to close, and told patients to look for other arrangements even before the law went into effect. Others have merged with different providers. Care providers also warn that these closures will result in a severe lack of specialized residential rehab centers or in-home care providers for auto accident patients.
Will the new car insurance law lower premiums?
The new no-fault car insurance change in Michigan could reduce premium costs. But, it can also mean less accessible rehabilitation services, medical procedures, and specialized programs for survivors of serious car accidents.
So while drivers may find themselves paying lower car insurance premiums, patients across the state may have their long-term care disrupted and be unable to find alternatives. However, a representative from the Insurance Alliance of Michigan says the new fee schedule will help prevent medical providers from overcharging insurance, according to Fox 47 News.
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