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New Michigan auto insurance law takes effect

Sarah Brown

A new law takes effect Wednesday that allows drivers to opt out of personal injury coverage in their auto insurance.

Drivers still have to carry liability coverage -- but now can choose how much medical coverage to buy.

Before now, state law required insurers to provide unlimited medical benefits if someone was injured in a crash.

The law’s goal is to make insurance more affordable, especially in cities premiums can be very high.

State Sen. Adam Hollier is a Detroit Democrat who voted for the change.

He says Michigan’s law was unique in the nation, and that his city has some of the most expensive auto insurance rates.

“And for too many people in my district, the only choice they had was to spend way more than they could actually afford on auto insurance or not have it and drive illegally, and that’s not something that was available on the auto insurance market. It was the number one issue when I was out knocking on doors.” 

Opponents of the new law say it will force some catastrophically injured victims to burn through their savings to get the care they need.

Randy Bruce is a therapist who works with brain injury victims. He’s also active with a group that opposed the law.

He says people with brain injuries often require lengthy and expensive recovery services.

“So the new law, even though it gives people the choice to take lower amounts of medical coverage, it’s really not enough for people who are really seriously injured.”

The new law is also supposed to discourage insurance companies to use where a person lives to determine their insurance rates.

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Rick Pluta is Senior Capitol Correspondent for the Michigan Public Radio Network. He has been covering Michigan’s Capitol, government, and politics since 1987.
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