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Details released on auto insurance changes

two cars in a rear ending accident
Steve Carmody
Michigan Radio
Opps. A fender bender in Ann Arbor. Michiganders spend a lot for auto insurance.

Governor Gretchen Whitmer says an agreement has been reached in concept on bipartisan changes to Michigan's auto insurance laws.

Updated May 24, 2019 at 7:00 p.m.:

The Michigan Legislature voted on Friday on a bill to roll back the cost of auto insurance. The bill was supported by Republicans but Democrats were divided. Governor Gretchen Whitmer is expected to sign the bill.

Updated May 24, 2019, at 10:29 a.m.:

According to an outline of the plan obtained by Michigan Radio, the changes agreed upon by Whitmer and Republican legislative leaders include several choices for personal injury protection (PIP), mandatory rate relief, and creation of a fee schedule for medical providers - which would include a cap on charges to insurers between 200% and 250% of Medicare - and would lead to an eight year rate freeze.

Read the full bill here.

Drivers would be able to choose from several PIP options, including unlimited coverage with a 10% rate cut, $500,000 with a rate cut of 20%, and $250,000 with a rate cut of 35%. Those on Medicaid would be able to choose $50,000 with a 45% rate cut. Opt out options would be available for seniors. Additionally, other drivers would be able to opt out of PIP provided their private insurance included coverage for auto accident injuries for each driver in the household. 

Depending on the level of medical coverage a driver chooses, the new plan would require auto insurers to roll back rates for at least eight years. 

No longer will insurers be able to set rates based on non-driving factors like ZIP codes, marital status, gender, and credit scores. However, insurers will still be able to set rates based on geographic regions by using "territory" as a factor. 

Original Post, May 24, 2019, 8:48 a.m.: 

Whitmer says the deal reached between herself and Republican legislative leaders will guarantee rate relief for Michigan drivers and provide a choice in coverage levels.

She also says the deal removes the ability of insurance companies to discriminate based on non-driving factors.

Speaker of the House Lee Chatfield and Senate Majority Leader Mike Shirkey also praised the agreement.

“After very productive negotiations with our governor over the past week, we now have an agreement on a bipartisan plan that will be signed into law. Today’s vote will be a significant victory for the hard-working people of Michigan that will finally fix our broken car insurance system and deliver real, meaningful rate relief for families, seniors and household budgets all over the state,” they said in a joint statement.

Detroit Mayor Mike Duggan also praised the agreement.

"The bipartisan auto insurance agreement announced today is outstanding," Duggan said. "It will cut rates for Michigan drivers significantly, and we congratulate Governor Whitmer and the Republican and Democratic leadership for coming up with an excellent bipartisan deal."

Details of the exact agreement have not been released.

The legislature may vote on the proposals as early as today.

Vincent Duffy has been news director at Michigan Public since May 2007.
Jodi is Michigan Public's Director of Digital Audiences, leading and developing the station’s overall digital strategy.
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