The Senate is now considering the current unlimited personal injury protection at $50,000.
New legislation has just been introduced into the Michigan Senate, which would change the current unlimited personal injury protection (PIP) protection from the state’s no fault system and cap it at $50,000.
Michigan is currently the only state where vehicle related injuries are covered for a lifetime of medical care.
The current no fault auto insurance system in the state would provide someone who was injured in a vehicle accident with an unlimited personal injury coverage for medical care. Some of the Republican lawmakers in the state, in addition to Governor Rick Snyder, have been working to reform this system, which is currently facing rapidly rising costs.
The issue of the auto insurance system in Michigan was a part of his January State of the State address.
When Governor Snyder spoke about this issue, he mentioned that Michigan has some of the highest auto insurance rates in the entire country. However, this issue remains highly controversial. Accident victims and the medical community are strongly opposed to limiting the benefits provided by the personal injury protection system.
The Senate bill is sponsored by Senator Joseph Hune (R-Hamburg Township) and Senator Virgil Smith (D-Detroit). Senator Smith has acknowledged that this will not be an easy process, particularly in gaining the support of his fellow Democrats. However, he feels very strongly about the importance of reducing auto insurance expenses in Detroit, where motorists pay more than anywhere else in the United States.
Smith is not new to this issue. His Master’s degree in public affairs thesis dealt with the cost of auto insurance. During the last session, lawmakers had proposed legislation that would allow drivers to have the choice as to what their maximum PIP coverage should be, within a range of $500,000 to $5 million. However, the bill put forward by Smith would place a cap at $50,000. Last year’s proposal stalled, so that a new version had to be created this year.
Should this auto insurance bill move forward, it could also dissolve the Michigan Catastrophic Claims Association once the liabilities have been paid. This would not be a retroactive cap and would apply only to policies that are either purchased or renewed as of January 1, 2014.