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Lawsuit challenges Michigan's no-fault auto insurance law

Steve Carmody
Michigan Radio

A federal lawsuit filed Thursday is challenging Michigan’s no-fault auto insurance law.

Detroit Mayor Mike Duggan is among the plaintiffs suing the state Insurance agency. The other plaintiffs represent a wide mix of people from different parts of the state.

The suit claims the no-fault system is charging motorists too much, making the law “unconstitutionally unaffordable.”  According to the lawsuit, the average Michigan annual auto insurance premium is $3,059, roughly twice the national average. Also, the suit notes that the average auto insurance premium in Detroit is twice the state average.

“This law is causing thousands of people across Michigan to break the law by driving without insurance because they simply can no longer afford it,” says Detroit Mayor Mike Duggan.

The suit says prices are so high becauseof various factors, including unlimited statutory personal injury protection benefits and allowing medical providers to charge exorbitant fees.

The lawsuit asks the court to give the Michigan legislature six months to fix the system or dump no-fault altogether. 

State officials are declining comment on the lawsuit.

State insurance industry groups are voicing support for changing the current system. 

“We agree with Mayor Duggan that Michigan’s auto no-fault system is broken, outdated and has forced Michigan drivers to pay some of the highest auto insurance premiums in the country because it lacks common sense cost-controls and has become a welcome mat for fraud,” says Pete Kuhnmuench, executive director of the Insurance Alliance of Michigan.

The state legislature has tried and failedin the past to make changes to Michigan’s auto insurance system.   This lawsuit may force their hand.

Steve Carmody has been a reporter for Michigan Public since 2005. Steve previously worked at public radio and television stations in Florida, Oklahoma and Kentucky, and also has extensive experience in commercial broadcasting.
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